DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 3 Months Ended | |
Mar. 31, 2014 | Apr. 24, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Entity Registrant Name | 'QUEST DIAGNOSTICS INC | ' |
Entity Central Index Key | '0001022079 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 144,485,296 |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Statement [Abstract] | ' | ' |
Net revenues | $1,746 | $1,787 |
Operating costs and expenses: | ' | ' |
Cost of services | 1,101 | 1,092 |
Selling, general and administrative | 415 | 448 |
Amortization of intangible assets | 22 | 19 |
Other operating expense, net | 0 | 1 |
Total operating costs and expenses | 1,538 | 1,560 |
Operating income | 208 | 227 |
Other income (expense): | ' | ' |
Interest expense, net | -39 | -40 |
Equity in earnings of equity method investees | 6 | 6 |
Other income, net | 1 | 4 |
Total non-operating expenses, net | -32 | -30 |
Income from continuing operations before taxes | 176 | 197 |
Income tax expense | 65 | 73 |
Income from continuing operations | 111 | 124 |
Income from discontinued operations, net of taxes | 0 | 20 |
Net income | 111 | 144 |
Less: Net income attributable to noncontrolling interests | 7 | 8 |
Net income attributable to Quest Diagnostics | 104 | 136 |
Amounts attributable to Quest Diagnostics' stockholders: | ' | ' |
Income from continuing operations | 104 | 116 |
Income from discontinued operations, net of taxes | 0 | 20 |
Net income attributable to Quest Diagnostics | $104 | $136 |
Earnings per share attributable to Quest Diagnostics' common stockholders - basic: | ' | ' |
Income from continuing operations | $0.72 | $0.73 |
Income from discontinued operations, per basic share | $0 | $0.13 |
Net income | $0.72 | $0.86 |
Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: | ' | ' |
Income from continuing operations | $0.71 | $0.72 |
Income from discontinued operations, per diluted share | $0 | $0.13 |
Net income | $0.71 | $0.85 |
Weighted average common shares outstanding: | ' | ' |
Basic | 144 | 158 |
Diluted | 145 | 159 |
Dividends per common share | $0.33 | $0.30 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' |
Net income | $111 | $144 |
Other comprehensive income (loss): | ' | ' |
Currency translation | -1 | -4 |
Net deferred loss on cash flow hedges, net of tax | -2 | 0 |
Other comprehensive loss | -3 | -4 |
Comprehensive income | 108 | 140 |
Less: Comprehensive income attributable to noncontrolling interests | 7 | 8 |
Comprehensive income attributable to Quest Diagnostics | $101 | $132 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents | $144 | $187 |
Accounts receivable, net of allowance for doubtful accounts of $246 and $236 at March 31, 2014 and December 31, 2013, respectively | 977 | 852 |
Inventories | 99 | 91 |
Deferred income taxes | 153 | 148 |
Prepaid expenses and other current assets | 115 | 105 |
Total current assets | 1,488 | 1,383 |
Property, plant and equipment, net | 851 | 805 |
Goodwill | 5,920 | 5,649 |
Intangible assets, net | 1,078 | 896 |
Other assets | 213 | 215 |
Total assets | 9,550 | 8,948 |
Liabilities and Stockholders' Equity | ' | ' |
Accounts payable and accrued expenses | 969 | 920 |
Short-term borrowings and current portion of long-term debt | 223 | 212 |
Total current liabilities | 1,192 | 1,132 |
Long-term debt | 3,724 | 3,120 |
Other liabilities | 614 | 723 |
Quest Diagnostics stockholders’ equity: | ' | ' |
Common stock, par value $0.01 per share; 600 shares authorized at both March 31, 2014 and December 31, 2013; 215 shares issued at both March 31, 2014 and December 31, 2013 | 2 | 2 |
Additional paid-in capital | 2,381 | 2,379 |
Retained earnings | 5,415 | 5,358 |
Accumulated other comprehensive loss | -11 | -8 |
Treasury stock, at cost; 71 shares at both March 31, 2014 and December 31, 2013 | -3,795 | -3,783 |
Total Quest Diagnostics stockholders' equity | 3,992 | 3,948 |
Noncontrolling interests | 28 | 25 |
Total stockholders' equity | 4,020 | 3,973 |
Total liabilities and stockholders' equity | $9,550 | $8,948 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ' | ' |
Allowance for doubtful accounts | $246 | $236 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 600 | 600 |
Common stock, shares, issued | 215 | 215 |
Treasury stock, shares | 71 | 71 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $111 | $144 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 75 | 70 |
Provision for doubtful accounts | 75 | 72 |
Deferred income tax benefit | -10 | 0 |
Stock-based compensation expense | 12 | 5 |
Excess tax benefits from stock-based compensation arrangements | 0 | -1 |
Other, net | -2 | -1 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -152 | -132 |
Accounts payable and accrued expenses | -86 | -77 |
Income taxes payable | 70 | -29 |
Other assets and liabilities, net | -9 | -4 |
Net cash provided by operating activities | 84 | 47 |
Cash flows from investing activities: | ' | ' |
Business acquisitions, net of cash acquired | -567 | -90 |
Capital expenditures | -68 | -49 |
Increase in investments and other assets | -1 | -1 |
Net cash used in investing activities | -636 | -140 |
Cash flows from financing activities: | ' | ' |
Proceeds from borrowings | 1,513 | 176 |
Repayments of debt | -923 | -132 |
Purchases of treasury stock | -32 | -62 |
Exercise of stock options | 12 | 14 |
Excess tax benefits from stock-based compensation arrangements | 0 | 1 |
Dividends paid | -43 | -48 |
Distributions to noncontrolling interests | -3 | -3 |
Other financing activities, net | -15 | -6 |
Net cash provided by (used in) financing activities | 509 | -60 |
Net change in cash and cash equivalents | -43 | -153 |
Change in cash and cash equivalents included in assets held for sale | 0 | -9 |
Cash and cash equivalents, beginning of period | 187 | 296 |
Cash and cash equivalents, end of period | $144 | $134 |
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 Millions | |||||||
Balance, value at Dec. 31, 2012 | $4,186 | $2 | $2,371 | $4,690 | $14 | ($2,914) | $23 |
Balance, shares at Dec. 31, 2012 | ' | 158 | ' | ' | ' | ' | ' |
Net income | 144 | ' | ' | 136 | ' | ' | 8 |
Other comprehensive loss, net of tax | -4 | ' | ' | ' | -4 | ' | ' |
Dividends declared | -47 | ' | ' | -47 | ' | ' | ' |
Distributions to noncontrolling interests | -3 | ' | ' | ' | ' | ' | -3 |
Issuance of common stock under benefit plans, value | 5 | ' | 1 | ' | ' | 4 | ' |
Issuance of common stock under benefit plans, shares | ' | 1 | ' | ' | ' | ' | ' |
Stock-based compensation expense | 5 | ' | 4 | ' | ' | 1 | ' |
Exercise of stock options, value | 14 | ' | -1 | ' | ' | 15 | ' |
Exercise of stock options, shares | ' | ' | ' | ' | ' | ' | ' |
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, value | -9 | ' | -9 | ' | ' | ' | ' |
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, shares | ' | ' | ' | ' | ' | ' | ' |
Tax benefits associated with stock-based compensation plans | -1 | ' | -1 | ' | ' | ' | ' |
Purchases of treasury stock, value | -62 | ' | ' | ' | ' | -62 | ' |
Purchases of treasury stock, shares | ' | -1 | ' | ' | ' | ' | ' |
Balance, value at Mar. 31, 2013 | 4,228 | 2 | 2,365 | 4,779 | 10 | -2,956 | 28 |
Balance, shares at Mar. 31, 2013 | ' | 158 | ' | ' | ' | ' | ' |
Balance, value at Dec. 31, 2013 | 3,973 | 2 | 2,379 | 5,358 | -8 | -3,783 | 25 |
Balance, shares at Dec. 31, 2013 | ' | 144 | ' | ' | ' | ' | ' |
Net income | 111 | ' | ' | 104 | ' | ' | 7 |
Other comprehensive loss, net of tax | -3 | ' | ' | ' | -3 | ' | ' |
Dividends declared | -47 | ' | ' | -47 | ' | ' | ' |
Distributions to noncontrolling interests | -3 | ' | ' | ' | ' | ' | -3 |
Issuance of common stock under benefit plans, value | 5 | ' | ' | ' | ' | 5 | ' |
Issuance of common stock under benefit plans, shares | ' | 1 | ' | ' | ' | ' | ' |
Stock-based compensation expense | 12 | ' | 11 | ' | ' | 1 | ' |
Exercise of stock options, value | 12 | ' | -2 | ' | ' | 14 | ' |
Exercise of stock options, shares | ' | ' | ' | ' | ' | ' | ' |
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, value | -5 | ' | -5 | ' | ' | ' | ' |
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, shares | ' | ' | ' | ' | ' | ' | ' |
Tax benefits associated with stock-based compensation plans | -2 | ' | -2 | ' | ' | ' | ' |
Purchases of treasury stock, value | -32 | ' | ' | ' | ' | -32 | ' |
Purchases of treasury stock, shares | ' | -1 | ' | ' | ' | ' | ' |
Other | -1 | ' | ' | ' | ' | ' | -1 |
Balance, value at Mar. 31, 2014 | $4,020 | $2 | $2,381 | $5,415 | ($11) | ($3,795) | $28 |
Balance, shares at Mar. 31, 2014 | ' | 144 | ' | ' | ' | ' | ' |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 3 Months Ended |
Mar. 31, 2014 | |
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 offer a variety of solutions for life insurers, healthcare providers and others. 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 | 3 Months Ended |
Mar. 31, 2014 | |
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 2013 Annual Report on Form 10-K. | |
The year-end balance sheet data was derived from the audited financial statements as of December 31, 2013, but does not include all the disclosures required by accounting principles generally accepted in the United States (“GAAP”). | |
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 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, 2014, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board ("FASB") 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 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. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. | |
On January 1, 2014, the Company adopted a new accounting standard issued by the FASB on the financial statement presentation of unrecognized tax benefits. The 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 adoption of this standard did not have a material impact on the Company's consolidated financial statements. | |
New Accounting Pronouncement | |
In April 2014, the FASB issued an accounting standard update ("ASU") related to the presentation and reporting of discontinued operations, including the disposals of components of an entity. The ASU changes the criteria for reporting discontinued operations while enhancing disclosures in this area and requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This ASU is effective for the Company in the first quarter of 2015 and early adoption is permitted. The impact of the adoption of this ASU on the Company’s results of operation, financial position, cash flows and disclosures will be assessed as part of any future disposal activity. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
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 millions, except per share data): | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Amounts attributable to Quest Diagnostics’ stockholders: | ||||||||
Income from continuing operations | $ | 104 | $ | 116 | ||||
Income from discontinued operations, net of taxes | — | 20 | ||||||
Net income attributable to Quest Diagnostics’ common stockholders | $ | 104 | $ | 136 | ||||
Income from continuing operations | $ | 104 | $ | 116 | ||||
Less: Earnings allocated to participating securities | 1 | 1 | ||||||
Earnings available to Quest Diagnostics’ common stockholders – basic and diluted | $ | 103 | $ | 115 | ||||
Weighted average common shares outstanding – basic | 144 | 158 | ||||||
Effect of dilutive securities: | ||||||||
Stock options and performance share units | 1 | 1 | ||||||
Weighted average common shares outstanding – diluted | 145 | 159 | ||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – basic: | ||||||||
Income from continuing operations | $ | 0.72 | $ | 0.73 | ||||
Income from discontinued operations | — | 0.13 | ||||||
Net income | $ | 0.72 | $ | 0.86 | ||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – diluted: | ||||||||
Income from continuing operations | $ | 0.71 | $ | 0.72 | ||||
Income from discontinued operations | — | 0.13 | ||||||
Net income | $ | 0.71 | $ | 0.85 | ||||
The following securities were not included in the calculation of diluted earnings per share due to their antidilutive effect (shares in millions): | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Stock options and performance share units | 6 | 2 | ||||||
RESTRUCTURING_ACTIVITIES
RESTRUCTURING ACTIVITIES | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Restructuring and Related Activities [Abstract] | ' | |||||||||||
RESTRUCTURING ACTIVITIES | ' | |||||||||||
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 mitigate the impact of 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. | ||||||||||||
The following table provides a summary of the Company's pre-tax restructuring charges associated with its Invigorate program and other restructuring activities for the three months ended March 31, 2014 and 2013: | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Employee separation costs | $ | 8 | $ | 34 | ||||||||
Facility-related costs | 1 | — | ||||||||||
Accelerated vesting of stock-based compensation | — | 1 | ||||||||||
Total restructuring charges | $ | 9 | $ | 35 | ||||||||
Total restructuring charges incurred for the three months ended March 31, 2014 included $8 million of employee | ||||||||||||
separation costs associated with various workforce reduction initiatives as the Company continues to simply its organization. Of the total $9 million in restructuring charges incurred during the three months ended March 31, 2014, $8 million and $1 million were recorded in cost of services and selling, general and administrative expenses, respectively. | ||||||||||||
Total restructuring charges incurred during the three months ended March 31, 2013 included $18 million of employee | ||||||||||||
separation costs incurred in connection with the Company's management layer reduction initiative, $3 million represents costs incurred under the Company's voluntary retirement program, with the remaining costs associated with various workforce reduction initiatives. Of the total $35 million in restructuring charges incurred during the three months ended March 31, 2013, $13 million and $22 million were recorded in cost of services and selling, general and administrative expenses, respectively. | ||||||||||||
Charges for both periods presented were primarily recorded in the Company's DIS business. | ||||||||||||
The following table summarizes activity in the restructuring liability as of March 31, 2014: | ||||||||||||
Employee Separation Costs | Facility-Related Costs | Total | ||||||||||
Balance, December 31, 2013 | $ | 31 | $ | 5 | $ | 36 | ||||||
Current period charges | 8 | 1 | 9 | |||||||||
Less: | ||||||||||||
Cash payments | (16 | ) | (1 | ) | (17 | ) | ||||||
Balance, March 31, 2014 | $ | 23 | $ | 5 | $ | 28 | ||||||
BUSINESS_ACQUISITION
BUSINESS ACQUISITION | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
BUSINESS ACQUISITION | ' | |||||||
BUSINESS ACQUISITION | ||||||||
Acquisition of Solstas Lab Partners Group | ||||||||
On March 7, 2014, the Company completed its acquisition of Solstas Lab Partners Group and its subsidiaries ("Solstas") in an all-cash transaction valued at $572 million, or $563 million net of cash acquired. The Company financed the acquisition with borrowings under its secured receivables credit facility and senior unsecured revolving credit facility. Through the acquisition, the Company acquired all of Solstas' operations. Solstas is a full-service commercial laboratory based in Greensboro, North Carolina and operates in nine states throughout the Southeastern United States, including the Carolinas, Virginia, Tennessee, Georgia and Alabama. | ||||||||
For the three months ended March 31, 2014, Solstas contributed $25 million to the Company's consolidated net revenues and $27 million to operating expenses, which includes $3 million of integration and transaction related costs recorded in selling, general and administrative expenses. | ||||||||
The acquisition of Solstas was accounted for under the acquisition method of accounting. As such, the assets acquired and liabilities assumed are recorded based on their estimated fair values as of the closing date. The purchase price allocation is based upon a preliminary valuation and the Company's estimates and assumptions are subject to change within the measurement period as the valuation is finalized. Management is currently in the process of verifying data and finalizing information related to the valuation and recording of identifiable intangible assets, certain other assets and liabilities and the corresponding effect on the amount of goodwill. All of the goodwill acquired in connection with the Solstas acquisition has been allocated to the Company's DIS business. | ||||||||
The following table summarizes the consideration paid for Solstas and the preliminary amounts of assets acquired and liabilities assumed at the acquisition date: | ||||||||
Preliminary Fair Values as of | ||||||||
7-Mar-14 | ||||||||
Cash and cash equivalents | $ | 9 | ||||||
Accounts receivable, net | 48 | |||||||
Current deferred income taxes | 7 | |||||||
Other current assets | 13 | |||||||
Property, plant and equipment, net | 51 | |||||||
Goodwill | 269 | |||||||
Intangible assets | 203 | |||||||
Non-current deferred income taxes | 42 | |||||||
Total assets acquired | 642 | |||||||
Current liabilities | 57 | |||||||
Non-current deferred income taxes | 4 | |||||||
Other non-current liabilities | 9 | |||||||
Total liabilities assumed | 70 | |||||||
Net assets acquired | $ | 572 | ||||||
The acquired amortizable customer relationships are being amortized over their estimated useful lives as follows: | ||||||||
Fair Values | Weighted Average Useful Life (in years) | |||||||
Customer relationships | $ | 203 | 20 | |||||
The goodwill recorded as part of the Solstas acquisition includes the expected synergies resulting from combining the operations of the acquired business with those of the Company and the value associated with an assembled workforce that has a historical track record of identifying opportunities. | ||||||||
Pro Forma Combined Financial Information | ||||||||
The following unaudited pro forma combined financial information reflects the consolidated statement of operations of the Company as if the acquisition of Solstas had occurred as of January 1, 2013. The pro forma information includes adjustments primarily related to the amortization of intangible assets acquired, interest expense associated with debt extinguished prior to the acquisition, and integration and transaction costs related to the Solstas acquisition. The pro forma combined financial information does not include the estimated annual synergies expected to be realized upon completion of the integration of Solstas and therefore is not indicative of the results of operations as they would have been had the transaction been effected on the assumed date. | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Pro forma net revenues | $ | 1,815 | $ | 1,886 | ||||
Pro forma income from continuing operations | $ | 110 | $ | 123 | ||||
Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: | ||||||||
Pro forma income from continuing operations | $ | 0.71 | $ | 0.73 | ||||
Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: | ||||||||
Pro forma income from continuing operations | $ | 0.7 | $ | 0.72 | ||||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
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 | ||||||||||||||||
March 31, 2014 | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 49 | $ | 49 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 29 | — | 29 | — | ||||||||||||
Put option | 4 | — | — | 4 | ||||||||||||
Interest rate swaps | 1 | — | 1 | — | ||||||||||||
Total | $ | 83 | $ | 49 | $ | 30 | $ | 4 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 83 | $ | — | $ | 83 | $ | — | ||||||||
Interest rate swaps | 29 | — | 29 | — | ||||||||||||
Call option | 8 | — | — | 8 | ||||||||||||
Forward starting interest rate swaps | 2 | — | 2 | — | ||||||||||||
Total | $ | 122 | $ | — | $ | 114 | $ | 8 | ||||||||
Basis of Fair Value Measurements | ||||||||||||||||
Quoted | Significant | Significant | ||||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets for | Inputs | |||||||||||||||
Identical | ||||||||||||||||
Assets / | ||||||||||||||||
Liabilities | ||||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 50 | $ | 50 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 29 | — | 29 | — | ||||||||||||
Put option | 4 | — | — | 4 | ||||||||||||
Forward starting interest rate swaps | 2 | — | 2 | — | ||||||||||||
Total | $ | 85 | $ | 50 | $ | 31 | $ | 4 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 84 | $ | — | $ | 84 | $ | — | ||||||||
Interest rate swaps | 34 | — | 34 | — | ||||||||||||
Call option | 8 | — | — | 8 | ||||||||||||
Total | $ | 126 | $ | — | $ | 118 | $ | 8 | ||||||||
A full description regarding the Company's fair value measurements is contained in Note 7 to the consolidated financial statements in the Company's 2013 Annual Report on Form 10-K. | ||||||||||||||||
The fair value measurements of the Company's interest rate swaps and forward starting swaps are model-derived valuations as of a given date in which all significant inputs are observable in active markets including certain financial information and certain assumptions regarding past, present and future market conditions. | ||||||||||||||||
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 12 months and their fair values have been measured using a combination of discounted cash flows and the Black-Scholes-Merton option pricing model. | ||||||||||||||||
There were no material changes in the Level 3 assets and liabilities using significant unobservable inputs for the three months ended March 31, 2014. | ||||||||||||||||
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 March 31, 2014, the fair value of the Company’s debt was estimated at $4.2 billion, which exceeded the carrying value by $293 million. At December 31, 2013, the fair value of the Company's debt was estimated at $3.5 billion, which exceeded the carrying value by $184 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 | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | ' | |||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | ||||||||||||||||||||||||||
The changes in goodwill for the three months ended March 31, 2014 and for the year ended December 31, 2013 are as follows: | ||||||||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Balance at beginning of period | $ | 5,649 | $ | 5,536 | ||||||||||||||||||||||
Goodwill acquired during the period | 271 | 150 | ||||||||||||||||||||||||
Write-off associated with sale of a business during the period | — | (37 | ) | |||||||||||||||||||||||
Balance at end of period | $ | 5,920 | $ | 5,649 | ||||||||||||||||||||||
Principally all of the Company’s goodwill as of March 31, 2014 and December 31, 2013 was associated with its DIS business. | ||||||||||||||||||||||||||
For the three months ended March 31, 2014, goodwill acquired was principally associated with the Solstas acquisition. This acquisition also resulted in $203 million of customer-related intangibles. For further details regarding the Solstas acquisition, see Note 5. | ||||||||||||||||||||||||||
For the year ended December 31, 2013, goodwill acquired was principally associated with the UMass, ATN, Dignity and ConVerge acquisitions, of which $135 million is deductible for tax purposes. These acquisitions also resulted in $108 million of intangible assets, principally comprised of customer-related intangibles. For further details regarding the Company's 2013 acquisitions, see Note 5 to the consolidated financial statements in the Company's 2013 Annual Report on Form 10-K. | ||||||||||||||||||||||||||
For the year ended December 31, 2013, $37 million of goodwill was written-off in conjunction with the sale of Enterix. For further details regarding the sale of Enterix, see Note 6 to the consolidated financial statements in the Company's 2013 Annual Report on Form 10-K. | ||||||||||||||||||||||||||
Intangible assets at March 31, 2014 and December 31, 2013 consisted of the following: | ||||||||||||||||||||||||||
Weighted | March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||
Period | ||||||||||||||||||||||||||
(in Years) | ||||||||||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||||
Amortizing intangible assets: | ||||||||||||||||||||||||||
Customer-related intangibles | 19 | $ | 873 | $ | (220 | ) | $ | 653 | $ | 670 | $ | (210 | ) | $ | 460 | |||||||||||
Non-compete agreements | 4 | 43 | (30 | ) | 13 | 43 | (27 | ) | 16 | |||||||||||||||||
Technology | 14 | 119 | (31 | ) | 88 | 119 | (28 | ) | 91 | |||||||||||||||||
Other | 8 | 142 | (63 | ) | 79 | 141 | (57 | ) | 84 | |||||||||||||||||
Total | 17 | 1,177 | (344 | ) | 833 | 973 | (322 | ) | 651 | |||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||
Tradenames | 244 | — | 244 | 244 | — | 244 | ||||||||||||||||||||
Other | 1 | — | 1 | 1 | — | 1 | ||||||||||||||||||||
Total intangible assets | $ | 1,422 | $ | (344 | ) | $ | 1,078 | $ | 1,218 | $ | (322 | ) | $ | 896 | ||||||||||||
Amortization expense related to intangible assets was $22 million and $19 million for the three months ended March 31, 2014 and 2013, respectively. | ||||||||||||||||||||||||||
The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of March 31, 2014 is as follows: | ||||||||||||||||||||||||||
Year Ending December 31, | ||||||||||||||||||||||||||
Remainder of 2014 | $ | 67 | ||||||||||||||||||||||||
2015 | 79 | |||||||||||||||||||||||||
2016 | 71 | |||||||||||||||||||||||||
2017 | 67 | |||||||||||||||||||||||||
2018 | 59 | |||||||||||||||||||||||||
2019 | 58 | |||||||||||||||||||||||||
Thereafter | 432 | |||||||||||||||||||||||||
Total | $ | 833 | ||||||||||||||||||||||||
DEBT
DEBT | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Instruments [Abstract] | ' | |||||||
DEBT | ' | |||||||
DEBT | ||||||||
Long-term debt at March 31, 2014 and December 31, 2013 consisted of the following: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Floating Rate Senior Notes due March 2014 | $ | — | $ | 200 | ||||
5.45% Senior Notes due November 2015 | 500 | 500 | ||||||
3.20% Senior Notes due April 2016 | 306 | 307 | ||||||
6.40% Senior Notes due July 2017 | 375 | 375 | ||||||
2.70% Senior Notes due April 2019 | 300 | — | ||||||
4.75% Senior Notes due January 2020 | 521 | 520 | ||||||
4.70% Senior Notes due April 2021 | 539 | 533 | ||||||
4.25% Senior Notes due April 2024 | 297 | — | ||||||
6.95% Senior Notes due July 2037 | 421 | 421 | ||||||
5.75% Senior Notes due January 2040 | 439 | 439 | ||||||
Other | 54 | 37 | ||||||
Total long-term debt | 3,752 | 3,332 | ||||||
Less: current portion of long-term debt | 28 | 212 | ||||||
Total long-term debt, net of current portion | $ | 3,724 | $ | 3,120 | ||||
2014 Senior Notes Offering | ||||||||
In March 2014, the Company completed a $600 million senior notes offering (the “2014 Senior Notes”) that was sold in two tranches: (a) $300 million aggregate principal amount of 2.70% senior notes due April 2019; and (b) $300 million aggregate principal amount of 4.25% senior notes due April 2024, issued at a discount of $1 million. These senior notes are unsecured obligations of the Company and rank equally with the Company's other senior unsecured obligations. None of the Company's senior notes have a sinking fund requirement. | ||||||||
The Company incurred $5 million of costs associated with the 2014 Senior Notes, which is included in other assets and is being amortized over the term of the related debt. | ||||||||
Maturities of Long-Term Debt | ||||||||
As of March 31, 2014, long-term debt matures as follows: | ||||||||
Year Ending December 31, | ||||||||
Remainder of 2014 | $ | 15 | ||||||
2015 | 523 | |||||||
2016 | 309 | |||||||
2017 | 380 | |||||||
2018 | 2 | |||||||
2019 | 300 | |||||||
Thereafter | 2,225 | |||||||
Total maturities of long-term debt | 3,754 | |||||||
Unamortized discount | (21 | ) | ||||||
Fair value basis adjustments attributable to hedged debt | 19 | |||||||
Total long-term debt | 3,752 | |||||||
Current portion of long-term debt | 28 | |||||||
Total long-term debt, net of current portion | $ | 3,724 | ||||||
For further discussion regarding the Company's debt, see Note 13 to the consolidated financial statements in the Company's 2013 Annual Report on Form 10-K. |
FINANCIAL_INSTRUMENTS
FINANCIAL INSTRUMENTS | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Derivative Instruments and Hedging Activities Disclosure [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: | ||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | |||||||||
Classification | Classification | |||||||||||
Derivatives Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Interest rate swaps | Other assets | $ | 1 | Other assets | $ | — | ||||||
Forward starting interest rate swaps | Other assets | — | Other assets | 2 | ||||||||
Total Asset Derivatives | 1 | 2 | ||||||||||
Liability Derivatives: | ||||||||||||
Interest rate swaps | Other liabilities | 29 | Other liabilities | 34 | ||||||||
Forward starting interest rate swaps | Other liabilities | 2 | Other liabilities | — | ||||||||
Total Liability Derivatives | 31 | 34 | ||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Put option | Other assets | 4 | Other assets | 4 | ||||||||
Liability Derivatives: | ||||||||||||
Call option | Other liabilities | 8 | Other liabilities | 8 | ||||||||
Total Net Derivatives Liabilities | $ | (34 | ) | $ | (36 | ) | ||||||
A full description regarding the Company's use of derivative financial instruments is contained in Note 14 to the consolidated financial statements in the Company's 2013 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 | ||||||||||||
In March 2014, the Company entered into interest rate lock agreements with several financial institutions for a total notional amount of $175 million. (the "Treasury Lock Agreements"). The Treasury Lock Agreements, which had an original maturity date of March 28, 2014, were entered into to hedge part of the Company's interest rate exposure associated with the variability in future cash flows attributable to changes in the five-year U.S. treasury rates related to the planned issuance of debt securities. In connection with the Company's senior notes offering in March 2014 (see note 8), the Company settled the Treasury Lock Agreements, which have been accounted for as cash flow hedges. The loss on settlement of the Treasury Lock Agreements was not material. During the fourth quarter of 2013 and the first quarter of 2014, the Company entered into various forward starting interest rate swap agreements (the "Forward Starting Interest Rate Swap Agreements") for an aggregate notional amount of $150 million. The Forward Starting Interest Rate Swap Agreements have fixed interest rates ranging from 3.570% to 3.788%. The Forward Starting Interest Rate Swap Agreements were 21 to 24 month forward agreements that covered a ten-year hedging period and were entered into to hedge part of the Company's interest rate exposure associated with forecasted new debt issuances related to the refinancing of certain debt maturing through 2016. Through time 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, related to the Company's cash flow hedges as of March 31, 2014 and December 31, 2013 was $8 million and $5 million, respectively. The loss recognized on the Company's cash flow hedges for the three months ended March 31, 2014 and 2013, 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 into earnings within the next twelve months is $1 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. In July 2012, the Company entered into fixed-to-variable interest rate swap agreements on a portion of the Senior Notes due 2016 and 2020. These interest rate swap agreements 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. In November 2013, the Company terminated the interest rate swaps associated with the Senior Notes due 2015 and concurrently entered into additional fixed-to-variable interest rate swaps agreements. The fixed-to-variable interest rate swap agreements entered into in November 2013 have an aggregate notional amount of $200 million and variable interest rates based on one-month LIBOR plus a spread ranging from 2.45% to 2.46% and are accounted for as fair value hedges on a portion of the Senior Notes due 2021. In March 2014, the Company entered into various fixed-to-variable interest rate swap agreements which have a notional amount of $250 million and variable interest rates based on one-month LIBOR plus a spread ranging from 1.54% to 1.59% and are accounted for as fair value hedges of a portion of the Senior Notes due 2024. | ||||||||||||
The interest rate swaps associated with the Senior Notes due 2016, 2020, 2024 and those on a portion of the Senior Notes due 2021 are classified as liabilities with an aggregate fair value of $29 million at March 31, 2014. The interest rate swaps associated with the Senior Notes due 2021 entered into in November 2013 are classified as assets with an aggregate fair value of $1 million at March 31, 2014. The interest rate swaps associated with the Senior Notes due 2016, 2020, and 2021 are classified as liabilities with an aggregate fair value of $34 million at December 31, 2013. Since inception, the fair value hedges have been highly effective; therefore, there is no impact on earnings for the three months ended March 31, 2014 and 2013 as a result of hedge ineffectiveness. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2014 | |
Stockholders' Equity Attributable to Parent [Abstract] | ' |
STOCKHOLDERS' EQUITY | ' |
STOCKHOLDERS’ EQUITY | |
Components of Comprehensive Income | |
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 9). For the three months ended March 31, 2014 and 2013, the tax effects related to the 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. | |
Dividend Program | |
During the first quarter of 2014, the Company's Board of Directors declared a quarterly cash dividend of $0.33 per common share. During each of the 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. | |
For the three months ended March 31, 2014, the Company repurchased 0.6 million shares of its common stock at an average price of $52.80 per share for $32 million. For the three months ended March 31, 2014, the Company reissued 0.4 million shares for employee benefit plans. At March 31, 2014, $796 million remained available under the Company’s share repurchase authorizations. | |
For the three months ended March 31, 2013, the Company repurchased 1.1 million shares of its common stock at an average price of $57.81 per share for a total of $62 million. For the three months ended March 31, 2013, the Company reissued 0.4 million shares for employee benefit plans. |
SUPPLEMENTAL_CASH_FLOW_OTHER_D
SUPPLEMENTAL CASH FLOW & OTHER DATA | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Supplemental Cash Flow Elements [Abstract] | ' | |||||||
SUPPLEMENTAL CASH FLOW & OTHER DATA | ' | |||||||
SUPPLEMENTAL CASH FLOW & OTHER DATA | ||||||||
Supplemental cash flow data for the three months ended March 31, 2014 and 2013 is as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Depreciation expense | $ | 53 | $ | 51 | ||||
Amortization expense | 22 | 19 | ||||||
Interest paid | 52 | 52 | ||||||
Income taxes paid | 9 | 84 | ||||||
Assets acquired under capital leases | 2 | — | ||||||
Decrease in accounts payable associated with capital expenditures | 21 | — | ||||||
Businesses acquired: | ||||||||
Fair value of assets acquired | 646 | 151 | ||||||
Fair value of liabilities assumed | 70 | 11 | ||||||
Fair value of net assets acquired | 576 | 140 | ||||||
Merger consideration paid (payable), net | — | (50 | ) | |||||
Cash paid for business acquisitions | 576 | 90 | ||||||
Less: Cash acquired | 9 | — | ||||||
Business acquisitions, net of cash acquired | $ | 567 | $ | 90 | ||||
Supplemental continuing operations data for the statement of operations for the three months ended March 31, 2014 and 2013 is as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Depreciation expense | $ | 53 | $ | 51 | ||||
Interest expense | (40 | ) | (41 | ) | ||||
Interest income | 1 | 1 | ||||||
Interest expense, net | $ | (39 | ) | $ | (40 | ) |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2014 | |
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, 2014. | |
In support of its risk management program, to ensure the Company’s performance or payment to third parties, $59 million in letters of credit were outstanding at March 31, 2014. 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 real estate leases that were entered into by certain predecessor companies of a subsidiary prior to the Company's acquisition of the subsidiary. No liability has been recorded for any of these potential contingent obligations. See Note 18 to the Consolidated Financial Statements contained in the Company’s 2013 Annual Report on Form 10-K for further details. | |
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, the Company has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with the Company's 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 the Company's client base and reputation. | |
The Company is also involved, from time to time, in other reviews, investigations and proceedings by governmental agencies regarding the Company's 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 the Company. | |
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’s motion for class certification of the ERISA claim was denied. | |
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. | |
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. The arbitrator denied the plaintiff’s 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. | |
In June 2010, the Company received a subpoena from the Florida Attorney General's Office seeking documents relating to the Company's pricing and billing practices as they relate to Florida’s Medicaid program. The Company cooperated with the requests. In November 2013, the State of Florida intervened as a plaintiff in a civil lawsuit, Florida ex rel. Hunter Laboratories LLC v. Quest Diagnostics Incorporated, et al., filed in Florida Circuit Court. The suit, originally filed by a competitor laboratory, alleges that the Company overcharged Florida’s Medicaid program. 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. The parties have settled the Georgia lawsuit and reached an agreement in principle to settle the Massachusetts lawsuit. | |
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, among other things, federal securities laws violations and breach of fiduciary duty claims against Celera, its directors and Credit Suisse. Following motions by the parties, the plaintiffs filed an amended complaint. | |
In October 2013, the Company commenced a lawsuit in the U.S. District Court for the Central District of California seeking a declaration that the Company’s BRCA1 and 2 tests do not infringe several patents of Myriad Genetics, Inc., or that the patents are invalid. Later that month, Myriad and its partners commenced a lawsuit in the U.S. District Court for the Central District of Utah against the Company alleging that the Company’s BRCA 1 and 2 tests infringed Myriad’s patents. Myriad moved to dismiss the Company’s lawsuit and to transfer all cases involving its BRCA 1 and 2 patents to the federal court in Utah. The Company moved to dismiss Myriad’s lawsuit. The Multidistrict Panel for Litigation consolidated for pre-trial proceedings in the U.S. District Court for the Central District of Utah all the litigation between the Company and Myriad regarding BRCA, and the parties withdrew their motions to dismiss without prejudice. | |
Berkeley HeartLab, Inc. (“BHL”), a Company subsidiary, received a subpoena from the Department of Health and Human Services regarding certain alleged business practices of BHL. In addition, the Company and BHL received civil investigative demands requesting responses to interrogatories. BHL and the Company are cooperating with the investigation. | |
The federal or state governments may bring claims based on the Company's current practices, which it believes are lawful. 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 March 31, 2014, the Company believes that there are no losses related to the 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 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, other than those described above in "Legal Matters", totaled less than $5 million at both March 31, 2014 and December 31, 2013. | |
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 $116 million and $121 million as of March 31, 2014 and December 31, 2013, 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 | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Discontinued Operations [Abstract] | ' | |||||||
DISCONTINUED OPERATIONS | ' | |||||||
DISCONTINUED OPERATIONS | ||||||||
Results of operations for OralDNA, HemoCue and NID have been reported as discontinued operations for the three months ended March 31, 2014 and 2013. | ||||||||
Income from discontinued operations, net of taxes for the three months ended March 31, 2013, includes discrete tax benefits of $20 million associated with favorable resolution of certain tax contingencies related to the Company's NID business. | ||||||||
Summarized financial information for the discontinued operations is as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Net revenues | $ | — | $ | 25 | ||||
Income from discontinued operations before taxes | — | 1 | ||||||
Income tax benefit | — | 19 | ||||||
Income from discontinued operations, net of taxes | $ | — | $ | 20 | ||||
The remaining balance sheet information related to HemoCue, OralDNA and NID was not material at March 31, 2014 and December 31, 2013. |
BUSINESS_SEGMENT_INFORMATION
BUSINESS SEGMENT INFORMATION | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
BUSINESS SEGMENT INFORMATION | ' | |||||||
BUSINESS SEGMENT INFORMATION | ||||||||
The clinical testing that the Company performs is an essential element in the delivery of healthcare services. Physicians use clinical testing to assist in detection, diagnosis, evaluation, monitoring and treatment of diseases and other medical conditions. | ||||||||
The Company's DIS business provides insights through clinical testing and related services that empower and enable patients, physicians, hospitals, integrated delivery networks, health plans, employers and others to make better healthcare decisions. The Company provides clinical testing, including routine testing, gene-based and esoteric testing, anatomic pathology services and drugs-of-abuse testing, as well as related services and insights. 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 2014 and 2013. | ||||||||
All other operating segments are included in the Company's DS business and consist of its risk assessment services, clinical trials testing, diagnostic products and healthcare information technology businesses. The Company's DS business offers a variety of solutions for life insurers, healthcare providers and others. The Company provides risk assessment services for the life insurance industry and the Company also provides testing for clinical trials. In addition, the Company offers healthcare organizations and clinicians robust information technology solutions, and diagnostic products, including test kits. | ||||||||
During the first quarter of 2014, the Company acquired Solstas, which is included in the Company's DIS business. See Note 5 for further details regarding business acquisitions. | ||||||||
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 13 for further details regarding discontinued operations. | ||||||||
At March 31, 2014, 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 months ended March 31, 2014 and 2013. 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 corporate activities included in the table below are comprised of general management and administrative corporate expenses, amortization of intangibles assets and other miscellaneous operating income and expenses, net of certain general corporate activity costs that are allocated to the DIS and DS businesses. 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 2013 Annual Report on Form 10-K and Note 2 to the interim consolidated financial statements. | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Net revenues: | ||||||||
DIS business | $ | 1,614 | $ | 1,649 | ||||
All other operating segments | 132 | 138 | ||||||
Total net revenues | $ | 1,746 | $ | 1,787 | ||||
Operating earnings (loss): | ||||||||
DIS business | $ | 231 | $ | 270 | ||||
All other operating segments | 18 | 14 | ||||||
General corporate activities | (41 | ) | (57 | ) | ||||
Total operating income | 208 | 227 | ||||||
Non-operating expenses, net | (32 | ) | (30 | ) | ||||
Income from continuing operations before taxes | 176 | 197 | ||||||
Income tax expense | 65 | 73 | ||||||
Income from continuing operations | 111 | 124 | ||||||
Income from discontinued operations, net of taxes | — | 20 | ||||||
Net income | 111 | 144 | ||||||
Less: Net income attributable to noncontrolling interests | 7 | 8 | ||||||
Net income attributable to Quest Diagnostics | $ | 104 | $ | 136 | ||||
SUBSEQUENT_EVENT
SUBSEQUENT EVENT | 3 Months Ended |
Mar. 31, 2014 | |
Subsequent Events [Abstract] | ' |
SUBSEQUENT EVENT | ' |
SUBSEQUENT EVENTS | |
The Company completed the acquisition of Summit Health, Inc. ("Summit Health"), a provider of on-site prevention and wellness programs on April 18, 2014 for approximately $113 million in cash paid at closing and contingent consideration of up to $25 million to be paid in 2016 based on the achievement of certain financial performance benchmarks. | |
The Company completed the acquisition of the outreach laboratory service operations of Steward Health Care Systems, LLC on April 16, 2014. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2014 | |
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 2013 Annual Report on Form 10-K. | |
The year-end balance sheet data was derived from the audited financial statements as of December 31, 2013, but does not include all the disclosures required by accounting principles generally accepted in the United States (“GAAP”). | |
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 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, 2014, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board ("FASB") 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 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. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. | |
On January 1, 2014, the Company adopted a new accounting standard issued by the FASB on the financial statement presentation of unrecognized tax benefits. The 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 adoption of this standard did not have a material impact on the Company's consolidated financial statements. | |
New Accounting Pronouncements | ' |
In April 2014, the FASB issued an accounting standard update ("ASU") related to the presentation and reporting of discontinued operations, including the disposals of components of an entity. The ASU changes the criteria for reporting discontinued operations while enhancing disclosures in this area and requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This ASU is effective for the Company in the first quarter of 2015 and early adoption is permitted. The impact of the adoption of this ASU on the Company’s results of operation, financial position, cash flows and disclosures will be assessed as part of any future disposal activity. | |
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. | |
EARNINGS_PER_SHARE_Tables
EARNINGS PER SHARE (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
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 millions, except per share data): | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Amounts attributable to Quest Diagnostics’ stockholders: | ||||||||
Income from continuing operations | $ | 104 | $ | 116 | ||||
Income from discontinued operations, net of taxes | — | 20 | ||||||
Net income attributable to Quest Diagnostics’ common stockholders | $ | 104 | $ | 136 | ||||
Income from continuing operations | $ | 104 | $ | 116 | ||||
Less: Earnings allocated to participating securities | 1 | 1 | ||||||
Earnings available to Quest Diagnostics’ common stockholders – basic and diluted | $ | 103 | $ | 115 | ||||
Weighted average common shares outstanding – basic | 144 | 158 | ||||||
Effect of dilutive securities: | ||||||||
Stock options and performance share units | 1 | 1 | ||||||
Weighted average common shares outstanding – diluted | 145 | 159 | ||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – basic: | ||||||||
Income from continuing operations | $ | 0.72 | $ | 0.73 | ||||
Income from discontinued operations | — | 0.13 | ||||||
Net income | $ | 0.72 | $ | 0.86 | ||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – diluted: | ||||||||
Income from continuing operations | $ | 0.71 | $ | 0.72 | ||||
Income from discontinued operations | — | 0.13 | ||||||
Net income | $ | 0.71 | $ | 0.85 | ||||
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 millions): | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Stock options and performance share units | 6 | 2 | ||||||
RESTRUCTURING_ACTIVITIES_Table
RESTRUCTURING ACTIVITIES (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
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 charges associated with its Invigorate program and other restructuring activities for the three months ended March 31, 2014 and 2013: | ||||||||||||
Three Months Ended March 31, | ||||||||||||
2014 | 2013 | |||||||||||
Employee separation costs | $ | 8 | $ | 34 | ||||||||
Facility-related costs | 1 | — | ||||||||||
Accelerated vesting of stock-based compensation | — | 1 | ||||||||||
Total restructuring charges | $ | 9 | $ | 35 | ||||||||
Schedule of Activity of Restructuring Liability | ' | |||||||||||
The following table summarizes activity in the restructuring liability as of March 31, 2014: | ||||||||||||
Employee Separation Costs | Facility-Related Costs | Total | ||||||||||
Balance, December 31, 2013 | $ | 31 | $ | 5 | $ | 36 | ||||||
Current period charges | 8 | 1 | 9 | |||||||||
Less: | ||||||||||||
Cash payments | (16 | ) | (1 | ) | (17 | ) | ||||||
Balance, March 31, 2014 | $ | 23 | $ | 5 | $ | 28 | ||||||
BUSINESS_ACQUISITION_Tables
BUSINESS ACQUISITION (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Business Combinations [Abstract] | ' | |||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | ' | |||||||
The following table summarizes the consideration paid for Solstas and the preliminary amounts of assets acquired and liabilities assumed at the acquisition date: | ||||||||
Preliminary Fair Values as of | ||||||||
7-Mar-14 | ||||||||
Cash and cash equivalents | $ | 9 | ||||||
Accounts receivable, net | 48 | |||||||
Current deferred income taxes | 7 | |||||||
Other current assets | 13 | |||||||
Property, plant and equipment, net | 51 | |||||||
Goodwill | 269 | |||||||
Intangible assets | 203 | |||||||
Non-current deferred income taxes | 42 | |||||||
Total assets acquired | 642 | |||||||
Current liabilities | 57 | |||||||
Non-current deferred income taxes | 4 | |||||||
Other non-current liabilities | 9 | |||||||
Total liabilities assumed | 70 | |||||||
Net assets acquired | $ | 572 | ||||||
Schedule of Finite-Lived Intangible Assets [Table Text Block] | ' | |||||||
The acquired amortizable customer relationships are being amortized over their estimated useful lives as follows: | ||||||||
Fair Values | Weighted Average Useful Life (in years) | |||||||
Customer relationships | $ | 203 | 20 | |||||
Business Acquisition, Pro Forma Information [Table Text Block] | ' | |||||||
The following unaudited pro forma combined financial information reflects the consolidated statement of operations of the Company as if the acquisition of Solstas had occurred as of January 1, 2013. The pro forma information includes adjustments primarily related to the amortization of intangible assets acquired, interest expense associated with debt extinguished prior to the acquisition, and integration and transaction costs related to the Solstas acquisition. The pro forma combined financial information does not include the estimated annual synergies expected to be realized upon completion of the integration of Solstas and therefore is not indicative of the results of operations as they would have been had the transaction been effected on the assumed date. | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Pro forma net revenues | $ | 1,815 | $ | 1,886 | ||||
Pro forma income from continuing operations | $ | 110 | $ | 123 | ||||
Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: | ||||||||
Pro forma income from continuing operations | $ | 0.71 | $ | 0.73 | ||||
Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: | ||||||||
Pro forma income from continuing operations | $ | 0.7 | $ | 0.72 | ||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | |||||||||||||||
Mar. 31, 2014 | ||||||||||||||||
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 | ||||||||||||||||
March 31, 2014 | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 49 | $ | 49 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 29 | — | 29 | — | ||||||||||||
Put option | 4 | — | — | 4 | ||||||||||||
Interest rate swaps | 1 | — | 1 | — | ||||||||||||
Total | $ | 83 | $ | 49 | $ | 30 | $ | 4 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 83 | $ | — | $ | 83 | $ | — | ||||||||
Interest rate swaps | 29 | — | 29 | — | ||||||||||||
Call option | 8 | — | — | 8 | ||||||||||||
Forward starting interest rate swaps | 2 | — | 2 | — | ||||||||||||
Total | $ | 122 | $ | — | $ | 114 | $ | 8 | ||||||||
Basis of Fair Value Measurements | ||||||||||||||||
Quoted | Significant | Significant | ||||||||||||||
Prices in | Other | Unobservable | ||||||||||||||
Active | Observable | Inputs | ||||||||||||||
Markets for | Inputs | |||||||||||||||
Identical | ||||||||||||||||
Assets / | ||||||||||||||||
Liabilities | ||||||||||||||||
December 31, 2013 | Level 1 | Level 2 | Level 3 | |||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 50 | $ | 50 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 29 | — | 29 | — | ||||||||||||
Put option | 4 | — | — | 4 | ||||||||||||
Forward starting interest rate swaps | 2 | — | 2 | — | ||||||||||||
Total | $ | 85 | $ | 50 | $ | 31 | $ | 4 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 84 | $ | — | $ | 84 | $ | — | ||||||||
Interest rate swaps | 34 | — | 34 | — | ||||||||||||
Call option | 8 | — | — | 8 | ||||||||||||
Total | $ | 126 | $ | — | $ | 118 | $ | 8 | ||||||||
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended | |||||||||||||||||||||||||
Mar. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||||
Changes in Goodwill, Net | ' | |||||||||||||||||||||||||
The changes in goodwill for the three months ended March 31, 2014 and for the year ended December 31, 2013 are as follows: | ||||||||||||||||||||||||||
March 31, | December 31, | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Balance at beginning of period | $ | 5,649 | $ | 5,536 | ||||||||||||||||||||||
Goodwill acquired during the period | 271 | 150 | ||||||||||||||||||||||||
Write-off associated with sale of a business during the period | — | (37 | ) | |||||||||||||||||||||||
Balance at end of period | $ | 5,920 | $ | 5,649 | ||||||||||||||||||||||
Intangible Assets Excluding Goodwill | ' | |||||||||||||||||||||||||
Intangible assets at March 31, 2014 and December 31, 2013 consisted of the following: | ||||||||||||||||||||||||||
Weighted | March 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||
Amortization | ||||||||||||||||||||||||||
Period | ||||||||||||||||||||||||||
(in Years) | ||||||||||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||||
Amortizing intangible assets: | ||||||||||||||||||||||||||
Customer-related intangibles | 19 | $ | 873 | $ | (220 | ) | $ | 653 | $ | 670 | $ | (210 | ) | $ | 460 | |||||||||||
Non-compete agreements | 4 | 43 | (30 | ) | 13 | 43 | (27 | ) | 16 | |||||||||||||||||
Technology | 14 | 119 | (31 | ) | 88 | 119 | (28 | ) | 91 | |||||||||||||||||
Other | 8 | 142 | (63 | ) | 79 | 141 | (57 | ) | 84 | |||||||||||||||||
Total | 17 | 1,177 | (344 | ) | 833 | 973 | (322 | ) | 651 | |||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||
Tradenames | 244 | — | 244 | 244 | — | 244 | ||||||||||||||||||||
Other | 1 | — | 1 | 1 | — | 1 | ||||||||||||||||||||
Total intangible assets | $ | 1,422 | $ | (344 | ) | $ | 1,078 | $ | 1,218 | $ | (322 | ) | $ | 896 | ||||||||||||
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 March 31, 2014 is as follows: | ||||||||||||||||||||||||||
Year Ending December 31, | ||||||||||||||||||||||||||
Remainder of 2014 | $ | 67 | ||||||||||||||||||||||||
2015 | 79 | |||||||||||||||||||||||||
2016 | 71 | |||||||||||||||||||||||||
2017 | 67 | |||||||||||||||||||||||||
2018 | 59 | |||||||||||||||||||||||||
2019 | 58 | |||||||||||||||||||||||||
Thereafter | 432 | |||||||||||||||||||||||||
Total | $ | 833 | ||||||||||||||||||||||||
DEBT_Tables
DEBT (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Debt Instruments [Abstract] | ' | |||||||
Long-term Debt | ' | |||||||
Long-term debt at March 31, 2014 and December 31, 2013 consisted of the following: | ||||||||
March 31, | December 31, | |||||||
2014 | 2013 | |||||||
Floating Rate Senior Notes due March 2014 | $ | — | $ | 200 | ||||
5.45% Senior Notes due November 2015 | 500 | 500 | ||||||
3.20% Senior Notes due April 2016 | 306 | 307 | ||||||
6.40% Senior Notes due July 2017 | 375 | 375 | ||||||
2.70% Senior Notes due April 2019 | 300 | — | ||||||
4.75% Senior Notes due January 2020 | 521 | 520 | ||||||
4.70% Senior Notes due April 2021 | 539 | 533 | ||||||
4.25% Senior Notes due April 2024 | 297 | — | ||||||
6.95% Senior Notes due July 2037 | 421 | 421 | ||||||
5.75% Senior Notes due January 2040 | 439 | 439 | ||||||
Other | 54 | 37 | ||||||
Total long-term debt | 3,752 | 3,332 | ||||||
Less: current portion of long-term debt | 28 | 212 | ||||||
Total long-term debt, net of current portion | $ | 3,724 | $ | 3,120 | ||||
Schedule of Maturities of Long-term Debt | ' | |||||||
As of March 31, 2014, long-term debt matures as follows: | ||||||||
Year Ending December 31, | ||||||||
Remainder of 2014 | $ | 15 | ||||||
2015 | 523 | |||||||
2016 | 309 | |||||||
2017 | 380 | |||||||
2018 | 2 | |||||||
2019 | 300 | |||||||
Thereafter | 2,225 | |||||||
Total maturities of long-term debt | 3,754 | |||||||
Unamortized discount | (21 | ) | ||||||
Fair value basis adjustments attributable to hedged debt | 19 | |||||||
Total long-term debt | 3,752 | |||||||
Current portion of long-term debt | 28 | |||||||
Total long-term debt, net of current portion | $ | 3,724 | ||||||
FINANCIAL_INSTRUMENTS_Tables
FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | |||||||||||
Mar. 31, 2014 | ||||||||||||
Derivative Instruments and Hedging Activities Disclosure [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: | ||||||||||||
March 31, 2014 | December 31, 2013 | |||||||||||
Balance Sheet | Fair Value | Balance Sheet | Fair Value | |||||||||
Classification | Classification | |||||||||||
Derivatives Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Interest rate swaps | Other assets | $ | 1 | Other assets | $ | — | ||||||
Forward starting interest rate swaps | Other assets | — | Other assets | 2 | ||||||||
Total Asset Derivatives | 1 | 2 | ||||||||||
Liability Derivatives: | ||||||||||||
Interest rate swaps | Other liabilities | 29 | Other liabilities | 34 | ||||||||
Forward starting interest rate swaps | Other liabilities | 2 | Other liabilities | — | ||||||||
Total Liability Derivatives | 31 | 34 | ||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Put option | Other assets | 4 | Other assets | 4 | ||||||||
Liability Derivatives: | ||||||||||||
Call option | Other liabilities | 8 | Other liabilities | 8 | ||||||||
Total Net Derivatives Liabilities | $ | (34 | ) | $ | (36 | ) |
SUPPLEMENTAL_CASH_FLOW_OTHER_D1
SUPPLEMENTAL CASH FLOW & OTHER DATA (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Supplemental Cash Flow Elements [Abstract] | ' | |||||||
Supplemental Cash Flow and Other Data | ' | |||||||
Supplemental cash flow data for the three months ended March 31, 2014 and 2013 is as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Depreciation expense | $ | 53 | $ | 51 | ||||
Amortization expense | 22 | 19 | ||||||
Interest paid | 52 | 52 | ||||||
Income taxes paid | 9 | 84 | ||||||
Assets acquired under capital leases | 2 | — | ||||||
Decrease in accounts payable associated with capital expenditures | 21 | — | ||||||
Businesses acquired: | ||||||||
Fair value of assets acquired | 646 | 151 | ||||||
Fair value of liabilities assumed | 70 | 11 | ||||||
Fair value of net assets acquired | 576 | 140 | ||||||
Merger consideration paid (payable), net | — | (50 | ) | |||||
Cash paid for business acquisitions | 576 | 90 | ||||||
Less: Cash acquired | 9 | — | ||||||
Business acquisitions, net of cash acquired | $ | 567 | $ | 90 | ||||
Schedule of Cash Flow, Supplemental Disclosures, Continuing Operations | ' | |||||||
Supplemental continuing operations data for the statement of operations for the three months ended March 31, 2014 and 2013 is as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Depreciation expense | $ | 53 | $ | 51 | ||||
Interest expense | (40 | ) | (41 | ) | ||||
Interest income | 1 | 1 | ||||||
Interest expense, net | $ | (39 | ) | $ | (40 | ) |
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Discontinued Operations [Abstract] | ' | |||||||
Summarized Financial Information for Discontinued Operations | ' | |||||||
Summarized financial information for the discontinued operations is as follows: | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Net revenues | $ | — | $ | 25 | ||||
Income from discontinued operations before taxes | — | 1 | ||||||
Income tax benefit | — | 19 | ||||||
Income from discontinued operations, net of taxes | $ | — | $ | 20 | ||||
BUSINESS_SEGMENT_INFORMATION_T
BUSINESS SEGMENT INFORMATION (Tables) | 3 Months Ended | |||||||
Mar. 31, 2014 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Summary of Segment Reporting Information by Segment | ' | |||||||
The following table is a summary of segment information for the three months ended March 31, 2014 and 2013. 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 corporate activities included in the table below are comprised of general management and administrative corporate expenses, amortization of intangibles assets and other miscellaneous operating income and expenses, net of certain general corporate activity costs that are allocated to the DIS and DS businesses. 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 2013 Annual Report on Form 10-K and Note 2 to the interim consolidated financial statements. | ||||||||
Three Months Ended March 31, | ||||||||
2014 | 2013 | |||||||
Net revenues: | ||||||||
DIS business | $ | 1,614 | $ | 1,649 | ||||
All other operating segments | 132 | 138 | ||||||
Total net revenues | $ | 1,746 | $ | 1,787 | ||||
Operating earnings (loss): | ||||||||
DIS business | $ | 231 | $ | 270 | ||||
All other operating segments | 18 | 14 | ||||||
General corporate activities | (41 | ) | (57 | ) | ||||
Total operating income | 208 | 227 | ||||||
Non-operating expenses, net | (32 | ) | (30 | ) | ||||
Income from continuing operations before taxes | 176 | 197 | ||||||
Income tax expense | 65 | 73 | ||||||
Income from continuing operations | 111 | 124 | ||||||
Income from discontinued operations, net of taxes | — | 20 | ||||||
Net income | 111 | 144 | ||||||
Less: Net income attributable to noncontrolling interests | 7 | 8 | ||||||
Net income attributable to Quest Diagnostics | $ | 104 | $ | 136 | ||||
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Earnings Per Share, Basic and Diluted [Abstract] | ' | ' |
Income from continuing operations | $104 | $116 |
Income from discontinued operations, net of taxes | 0 | 20 |
Net income attributable to Quest Diagnostics’ common stockholders | 104 | 136 |
Less: Earnings allocated to participating securities | 1 | 1 |
Earnings available to Quest Diagnostics' common stockholders - basic and diluted | $103 | $115 |
Weighted average common shares outstanding - basic | 144 | 158 |
Stock options and performance share units | 1 | 1 |
Weighted average common shares outstanding - diluted | 145 | 159 |
Income from continuing operations, per basic share | $0.72 | $0.73 |
Income from discontinued operations, per basic share | $0 | $0.13 |
Net income , per basic share | $0.72 | $0.86 |
Income from continuing operations, per diluted share | $0.71 | $0.72 |
Income from discontinued operations, per diluted share | $0 | $0.13 |
Net income, per diluted share | $0.71 | $0.85 |
Stock options and performance share units not included due to their antidilutive effect | 6 | 2 |
RESTRUCTURING_ACTIVITIES_Narra
RESTRUCTURING ACTIVITIES (Narrative) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Restructuring Cost and Reserve [Line Items] | ' | ' |
Restructuring charges | $9 | ($35) |
Cost of Services [Member] | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' |
Restructuring charges, including equity component | 8 | 13 |
Selling, General and Administrative Expenses [Member] | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' |
Restructuring charges, including equity component | 1 | 22 |
Other Restructuring Initiatives [Member] | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' |
Employee separation costs | 8 | ' |
Management Layer Reduction Initiative [Member] | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' |
Employee separation costs | ' | 18 |
Voluntary Retirement Program [Member] | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' |
Employee separation costs | ' | $3 |
RESTRUCTURING_ACTIVITIES_PreTa
RESTRUCTURING ACTIVITIES (Pre-Tax Restructuring and Integration Charges) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Restructuring Cost and Reserve [Line Items] | ' | ' |
Total restructuring charges | ($9) | $35 |
Invigorate Program [Member] | ' | ' |
Restructuring Cost and Reserve [Line Items] | ' | ' |
Employee Separation Costs | 8 | 34 |
Facility-related costs | 1 | 0 |
Accelerated vesting of stock-based compensation | 0 | 1 |
Total restructuring charges | $9 | $35 |
RESTRUCTURING_ACTIVITIES_Activ
RESTRUCTURING ACTIVITIES (Activities of Restructuring Liabilities) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Restructuring Reserve [Roll Forward] | ' | ' |
Balance, beginning of period | $36 | ' |
Current period charges | 9 | -35 |
Cash payments | -17 | ' |
Balance, end of period | 28 | ' |
Employee Separation Costs [Member] | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' |
Balance, beginning of period | 31 | ' |
Current period charges | 8 | ' |
Cash payments | -16 | ' |
Balance, end of period | 23 | ' |
Facility-Related Costs [Member] | ' | ' |
Restructuring Reserve [Roll Forward] | ' | ' |
Balance, beginning of period | 5 | ' |
Current period charges | 1 | ' |
Cash payments | -1 | ' |
Balance, end of period | $5 | ' |
BUSINESS_ACQUISITION_Narrative
BUSINESS ACQUISITION (Narrative) (Details) (USD $) | 3 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Mar. 07, 2014 |
Solstas Lab Parnters Group [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' |
Cash paid for acquisition | ' | ' | $572 |
Business acquisitions, net of cash acquired | 567 | 90 | 563 |
Operating expenses | ' | ' | 27 |
Net revenues | 1,746 | 1,787 | 25 |
Integration and transaction related costs | ' | ' | $3 |
BUSINESS_ACQUISITION_Considera
BUSINESS ACQUISITION (Consideration Paid) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 07, 2014 |
In Millions, unless otherwise specified | Solstas Lab Parnters Group [Member] | |||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | $9 |
Accounts receivable, net | ' | ' | ' | 48 |
Current deferred income taxes | ' | ' | ' | 7 |
Other current assets | ' | ' | ' | 13 |
Property, plant and equipment, net | ' | ' | ' | 51 |
Goodwill | 5,920 | 5,649 | 5,536 | 269 |
Intangible assets | ' | ' | ' | 203 |
Non-current deferred income taxes - Assets | ' | ' | ' | 42 |
Total assets acquired | ' | ' | ' | 642 |
Current liabilities | ' | ' | ' | 57 |
Non-current deferred income taxes - liabilities | ' | ' | ' | 4 |
Other non-current liabilities | ' | ' | ' | 9 |
Total liabilities assumed | ' | ' | ' | 70 |
Net assets acquired | ' | ' | ' | $572 |
BUSINESS_ACQUISITION_Amortizab
BUSINESS ACQUISITION (Amortizable Assets) (Details) (Solstas Lab Parnters Group [Member], Customer Relationships [Member], USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Mar. 07, 2014 |
Solstas Lab Parnters Group [Member] | Customer Relationships [Member] | ' |
Business Acquisition [Line Items] | ' |
Fair Value of Finite-lived Intangible Assets | $203 |
Weighted Average Useful Life | '20 years |
BUSINESS_ACQUISITION_Pro_Forma
BUSINESS ACQUISITION (Pro Forma) (Details) (Solstas Lab Parnters Group [Member], USD $) | 3 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Solstas Lab Parnters Group [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Pro forma net revenues | $1,815 | $1,886 |
Pro forma income from continuing operations | $110 | $123 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: | ' | ' |
Pro forma income from continuing operations | $0.71 | $0.73 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: | ' | ' |
Pro forma income from continuing operations | $0.70 | $0.72 |
FAIR_VALUE_MEASUREMENTS_Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | 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 | ' | ' | '12 months | '12 months | ' |
Fair value of debt | $4,200,000,000 | $3,500,000,000 | ' | ' | ' |
Debt Instrument Fair Value In Excess Of Carrying Value Of Debt | $293,000,000 | $184,000,000 | ' | ' | ' |
FAIR_VALUE_MEASUREMENTS_Recogn
FAIR VALUE MEASUREMENTS (Recognized Assets and Liabilities at Fair Value) (Details) (Recurring Basis [Member], USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Trading securities | $49 | $50 |
Cash surrender value of life insurance policies | 29 | 29 |
Total assets | 83 | 85 |
Deferred compensation liabilities | 83 | 84 |
Total liabilities | 122 | 126 |
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 | 50 |
Cash surrender value of life insurance policies | ' | ' |
Total assets | 49 | 50 |
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 | 29 | 29 |
Total assets | 30 | 31 |
Deferred compensation liabilities | 83 | 84 |
Total liabilities | 114 | 118 |
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 | ' | ' |
Total assets | 4 | 4 |
Deferred compensation liabilities | ' | ' |
Total liabilities | 8 | 8 |
Put Option [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative asset | 4 | 4 |
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 | 0 |
Put Option [Member] | Significant Unobservable Inputs, Level 3 [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative asset | 4 | 4 |
Interest Rate Swaps [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative asset | 1 | ' |
Derivative instruments, liabilities | 29 | 34 |
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 | 1 | ' |
Derivative instruments, liabilities | 29 | 34 |
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 | 8 | 8 |
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 | ' | 0 |
Call Option [Member] | Significant Unobservable Inputs, Level 3 [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative instruments, liabilities | 8 | 8 |
Forward Contracts [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative asset | ' | 2 |
Derivative instruments, liabilities | 2 | ' |
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 | ' | ' |
Forward Contracts [Member] | Significant Other Observable Inputs, Level 2 [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative asset | ' | 2 |
Derivative instruments, liabilities | 2 | ' |
Forward Contracts [Member] | Significant Unobservable Inputs, Level 3 [Member] | ' | ' |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ' | ' |
Derivative asset | ' | ' |
Derivative instruments, liabilities | ' | ' |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | |||||||||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 07, 2014 | Dec. 31, 2013 |
Enterix [Member] | Intangible Assets Not Subject to Amortization - Tradenames [Member] | Intangible Assets Not Subject to Amortization - Tradenames [Member] | Intangible Assets Not Subject to Amortization - Other [Member] | Intangible Assets Not Subject to Amortization - Other [Member] | Customer-related intangibles [Member] | Customer-related intangibles [Member] | Non-compete agreements [Member] | Non-compete agreements [Member] | Technology [Member] | Technology [Member] | Other [Member] | Other [Member] | Total Amortizing Intangible Assets [Member] | Total Amortizing Intangible Assets [Member] | Solstas Lab Parnters Group [Member] | UMass, ATN, Dignity and Con Verge Combined [Member] | ||||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $203 | ' |
Goodwill, Balance at beginning of period | 5,649 | 5,536 | 5,536 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 269 | ' |
Goodwill acquired during the period | 271 | ' | 150 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill impairment and write-off associated with sale of businesses during the period | 0 | ' | -37 | -37 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill, Balance at end of period | 5,920 | ' | 5,649 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 269 | ' |
Intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 108 |
Goodwill deductible for tax purposes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 135 |
Weighted Average Amortization Period | ' | ' | ' | ' | ' | ' | ' | ' | '19 years | ' | '4 years | ' | '14 years | ' | '8 years | ' | '17 years | ' | ' | ' |
Amortizing intangible assets, Cost | 1,422 | ' | 1,218 | ' | 244 | 244 | 1 | 1 | 873 | 670 | 43 | 43 | 119 | 119 | 142 | 141 | 1,177 | 973 | ' | ' |
Amortizing intangible assets, Accumulated Amortization | -344 | ' | -322 | ' | ' | ' | ' | ' | -220 | -210 | -30 | -27 | -31 | -28 | -63 | -57 | -344 | -322 | ' | ' |
Amortizing intangible assets, Net | 1,078 | ' | 896 | ' | 244 | 244 | 1 | 1 | 653 | 460 | 13 | 16 | 88 | 91 | 79 | 84 | 833 | 651 | ' | ' |
Amortization expense related to intangible assets | 22 | 19 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Remainder of 2014 | 67 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future Amortization Expense, 2015 | 79 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future Amortization Expense, 2016 | 71 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future Amortization Expense, 2017 | 67 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future Amortization Expense, 2018 | 59 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future Amortization Expense, 2019 | 58 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future Amortization Expense, Thereafter | 432 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future Amortization Expense, Total | $833 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
DEBT_Narrative_Details
DEBT (Narrative) (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2014 |
Debt Instrument [Line Items] | ' |
Debt offering amount | $600 |
Unamortized discount | 21 |
Debt issuance cost | 5 |
2.70% Senior Notes due April 2019 [Member] | ' |
Debt Instrument [Line Items] | ' |
Debt offering amount | 300 |
Debt instrument, interest rate | 2.70% |
4.25% Senior Notes due April 2024 [Member] | ' |
Debt Instrument [Line Items] | ' |
Debt offering amount | 300 |
Debt instrument, interest rate | 4.25% |
Unamortized discount | $1 |
DEBT_LongTerm_Debt_Details
DEBT (Long-Term Debt) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | $3,752 | $3,332 |
Less: current portion of long-term debt | 28 | 212 |
Total long-term debt, net of current portion | 3,724 | 3,120 |
Floating Rate Senior Notes due 2014 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 0 | 200 |
5.45% Senior Notes Due 2015 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 500 | 500 |
Debt instrument, interest rate | 5.45% | ' |
Debt instrument, maturity date | 1-Nov-15 | ' |
3.20% Senior Notes Due 2016 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 306 | 307 |
Debt instrument, interest rate | 3.20% | ' |
Debt instrument, maturity date | 1-Apr-16 | ' |
6.40% Senior Notes Due 2017 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 375 | 375 |
Debt instrument, interest rate | 6.40% | ' |
Debt instrument, maturity date | 1-Jul-17 | ' |
2.70% Senior Notes due April 2019 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 300 | 0 |
Debt instrument, interest rate | 2.70% | ' |
Debt instrument, maturity date | 1-Apr-19 | ' |
4.75% Senior Notes due January 2020 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 521 | 520 |
Debt instrument, interest rate | 4.75% | ' |
Debt instrument, maturity date | 30-Jan-20 | ' |
4.70% Senior Notes Due 2021 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 539 | 533 |
Debt instrument, interest rate | 4.70% | ' |
Debt instrument, maturity date | 1-Apr-21 | ' |
4.25% Senior Notes due April 2024 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 297 | 0 |
Debt instrument, interest rate | 4.25% | ' |
Debt instrument, maturity date | 1-Apr-24 | ' |
6.95% Senior Notes Due 2037 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 421 | 421 |
Debt instrument, interest rate | 6.95% | ' |
Debt instrument, maturity date | 1-Jul-37 | ' |
5.75% Senior Notes Due 2040 [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Total long-term debt | 439 | 439 |
Debt instrument, interest rate | 5.75% | ' |
Debt instrument, maturity date | 30-Jan-40 | ' |
Other Long-term Debt [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Other | $54 | $37 |
DEBT_Maturities_of_LongTerm_De
DEBT (Maturities of Long-Term Debt) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Debt Instruments [Abstract] | ' | ' |
Remainder of 2014 | $15 | ' |
2015 | 523 | ' |
2016 | 309 | ' |
2017 | 380 | ' |
2018 | 2 | ' |
2019 | 300 | ' |
Thereafter | 2,225 | ' |
Total maturities of debt | 3,754 | ' |
Unamortized discount | -21 | ' |
Debt Instrument, fair value basis adjustment attributable to hedged debt | 19 | ' |
Total long-term debt | 3,752 | 3,332 |
Current portion of long-term debt | 28 | 212 |
Total long-term debt, net of current portion | $3,724 | ' |
FINANCIAL_INSTRUMENTS_Narrativ
FINANCIAL INSTRUMENTS (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | 3 Months Ended | 3 Months Ended | 3 Months Ended | ||||||||||||||||
In Millions, unless otherwise specified | Mar. 31, 2014 | Dec. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Mar. 31, 2014 | Jul. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2013 | Mar. 31, 2014 | Jul. 31, 2012 | Mar. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2013 | Mar. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2013 | Jul. 31, 2012 |
Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Cash Flow Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Minimum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | Maximum [Member] | |||
Interest Rate Swaps [Member] | Interest Rate Swaps [Member] | Interest Rate Swaps [Member] | Treasury Lock [Member] | Forward Contracts [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | Cash Flow Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Cash Flow Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | Fair Value Hedging [Member] | ||||
4.70% Senior Notes Due 2021 [Member] | Six-Month LIBOR [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | One-Month LIBOR [Member] | |||||||||||||
Derivative [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notional amount of interest rate derivatives | ' | ' | ' | ' | ' | $175 | $150 | $550 | $250 | $400 | $200 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative, Maturity Date | ' | ' | ' | ' | ' | 28-Mar-14 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fixed interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.57% | ' | ' | ' | ' | 3.79% | ' | ' | ' | ' |
Term of contract | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '21 months | ' | ' | ' | ' | '24 months | ' | ' | ' | ' |
Accumulated net loss from designated or qualifying cash flow hedges | 8 | 5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net amount of deferred gains and losses on cash flow hedges that is expected to be reclassified within the next 12 months | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Variable interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.30% | 1.54% | 3.40% | 2.45% | ' | 1.59% | 5.10% | 2.46% | 3.60% |
Derivative instruments, liabilities | ' | ' | 29 | 34 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative asset | ' | ' | ' | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
FINANCIAL_INSTRUMENTS_Summary_
FINANCIAL INSTRUMENTS (Summary of Fair Value of Derivatives) (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivative [Line Items] | ' | ' |
Total Net Derivatives Liabilities | ($34) | ($36) |
Designated as Hedging Instrument [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Asset Derivatives | 1 | 2 |
Liability Derivatives | 31 | 34 |
Other Assets [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Asset Derivatives | 1 | 0 |
Other Assets [Member] | Designated as Hedging Instrument [Member] | Forward Contracts [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Asset Derivatives | 0 | 2 |
Other Assets [Member] | Not Designated as Hedging Instrument [Member] | Put Option [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Asset Derivatives | 4 | 4 |
Other Liabilities [Member] | Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Liability Derivatives | 29 | 34 |
Other Liabilities [Member] | Designated as Hedging Instrument [Member] | Forward Contracts [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Liability Derivatives | 2 | 0 |
Other Liabilities [Member] | Not Designated as Hedging Instrument [Member] | Call Option [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Liability Derivatives | $8 | $8 |
STOCKHOLDERS_EQUITY_Narrative_
STOCKHOLDERS' EQUITY (Narrative) (Details) (USD $) | 1 Months Ended | 3 Months Ended | ||||
Share data in Millions, except Per Share data, unless otherwise specified | Aug. 31, 2013 | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 |
Stockholder's Equity Narrative [Details] | ' | ' | ' | ' | ' | ' |
Dividend program | ' | $0.33 | $0.30 | $0.30 | $0.30 | $0.30 |
Treasury stock aquired repurchase program | $1,000,000,000 | ' | ' | ' | ' | ' |
Share repurchase authorization remaining available | 1,300,000,000 | 796,000,000 | ' | ' | ' | ' |
Treasury stock value acquired cost method | ' | 32,000,000 | 62,000,000 | ' | ' | ' |
Reissuance of shares for employee benefit plan | ' | 0.4 | 0.4 | ' | ' | ' |
Share Repurchases Open Market [Member] | ' | ' | ' | ' | ' | ' |
Stockholder's Equity Narrative [Details] | ' | ' | ' | ' | ' | ' |
Treasury stock shares acquired | ' | 0.6 | 1.1 | ' | ' | ' |
Treasury stock acquired average cost per share | ' | $52.80 | $57.81 | ' | ' | ' |
Treasury stock value acquired cost method | ' | $32,000,000 | $62,000,000 | ' | ' | ' |
SUPPLEMENTAL_CASH_FLOW_OTHER_D2
SUPPLEMENTAL CASH FLOW & OTHER DATA (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Supplemental Cash Flow Elements [Abstract] | ' | ' |
Depreciation expense | $53 | $51 |
Amortization expense | 22 | 19 |
Interest paid | 52 | 52 |
Income taxes paid | 9 | 84 |
Assets acquired under capital leases | 2 | 0 |
Decrease in accounts payable associated with capital expenditures | 21 | 0 |
Fair value of assets acquired | 646 | 151 |
Fair value of liabilities assumed | 70 | 11 |
Fair value of net assets acquired | 576 | 140 |
Merger consideration paid (payable), net | 0 | -50 |
Cash paid for business acquisitions | 576 | 90 |
Less: Cash acquired | 9 | 0 |
Business acquisitions, net of cash acquired | $567 | $90 |
SUPPLEMENTAL_CASH_FLOW_OTHER_D3
SUPPLEMENTAL CASH FLOW & OTHER DATA (Continuing Operations) (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Supplemental Cash Flow and Other Data [Line Items] | ' | ' |
Depreciation expense | $53 | $51 |
Interest expense, net | -39 | -40 |
Segment, Continuing Operations [Member] | ' | ' |
Supplemental Cash Flow and Other Data [Line Items] | ' | ' |
Depreciation expense | 53 | 51 |
Interest expense | -40 | -41 |
Interest income | 1 | 1 |
Interest expense, net | ($39) | ($40) |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 | Mar. 31, 2014 |
In Millions, unless otherwise specified | Line of Credit [Member] | ||
Long-term Purchase Commitment [Line Items] | ' | ' | ' |
Line of credit | $85 | ' | ' |
Debt instrument, maturity date | ' | ' | 18-Nov-14 |
Letters of credit outstanding, amount | 59 | ' | ' |
Litigation reserves | 5 | 5 | ' |
Self-insurance reserves | $116 | $121 | ' |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Net revenues | $0 | $25 |
Income from discontinued operations before taxes | 0 | 1 |
Income tax benefit | 0 | 19 |
Income from discontinued operations, net of taxes | 0 | 20 |
NID [Member] | ' | ' |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' |
Discrete tax benefits | ' | $20 |
BUSINESS_SEGMENT_INFORMATION_D
BUSINESS SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' |
Percentage of net revenues from the DIS business | 90.00% | 90.00% |
Total net revenues | $1,746 | $1,787 |
Total operating income | 208 | 227 |
Non-operating expenses, net | -32 | -30 |
Income from continuing operations before taxes | 176 | 197 |
Income tax expense | 65 | 73 |
Income from continuing operations | 111 | 124 |
Income from discontinued operations, net of taxes | 0 | 20 |
Net income | 111 | 144 |
Less: Net income attributable to noncontrolling interests | 7 | 8 |
Net income attributable to Quest Diagnostics | 104 | 136 |
DIS business | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total net revenues | 1,614 | 1,649 |
Total operating income | 231 | 270 |
All other operating segments [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total net revenues | 132 | 138 |
Total operating income | 18 | 14 |
General corporate expenses [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Total operating income | ($41) | ($57) |
SUBSEQUENT_EVENT_Details
SUBSEQUENT EVENT (Details) (Subsequent Event [Member], USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Apr. 18, 2014 |
Subsequent Event [Member] | ' |
Subsequent Event [Line Items] | ' |
Cash paid for acquisition | $113 |
Contingent consideration, liability | $25 |