DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Jan. 31, 2015 | Jun. 30, 2014 |
Document and Entity Information [Abstract] | |||
Document type | 10-K | ||
Amendment flag | FALSE | ||
Document period end date | 31-Dec-14 | ||
Document fiscal year focus | 2014 | ||
Document fiscal period focus | FY | ||
Entity registrant name | QUEST DIAGNOSTICS INC | ||
Entity central index key | 1022079 | ||
Current fiscal year end date | -19 | ||
Entity filer category | Large Accelerated Filer | ||
Entity public float | $8.50 | ||
Entity common stock, shares outstanding | 144,311,302 | ||
Entity current reporting status | Yes | ||
Entity voluntary filers | No | ||
Entity well-known seasoned issuer | Yes |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Assets | ||
Cash and cash equivalents | $192 | $187 |
Accounts receivable, net of allowance for doubtful accounts of $250 and $236 at December 31, 2014 and 2013, respectively | 932 | 852 |
Inventories | 110 | 91 |
Deferred income taxes | 169 | 148 |
Prepaid expenses and other current assets | 200 | 105 |
Total current assets | 1,603 | 1,383 |
Property, plant and equipment, net | 933 | 805 |
Goodwill | 6,032 | 5,649 |
Intangible assets, net | 1,071 | 896 |
Other assets | 238 | 215 |
Total assets | 9,877 | 8,948 |
Liabilities and Stockholders' Equity | ||
Accounts payable and accrued expenses | 1,191 | 920 |
Current portion of long-term debt | 518 | 212 |
Total current liabilities | 1,709 | 1,132 |
Long-term debt | 3,244 | 3,120 |
Other liabilities | 594 | 723 |
Quest Diagnostics stockholders’ equity: | ||
Common stock, par value $0.01 per share; 600 shares authorized at both December 31, 2014 and 2013; 215 shares issued at both December 31, 2014 and 2013 | 2 | 2 |
Additional paid-in capital | 2,418 | 2,379 |
Retained earnings | 5,723 | 5,358 |
Accumulated other comprehensive (loss) income | -27 | -8 |
Treasury stock, at cost; 71 shares at both December 31, 2014 and 2013 | -3,815 | -3,783 |
Total Quest Diagnostics stockholders' equity | 4,301 | 3,948 |
Noncontrolling interests | 29 | 25 |
Total stockholders' equity | 4,330 | 3,973 |
Total liabilities and stockholders' equity | $9,877 | $8,948 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $250 | $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_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Income Statement [Abstract] | |||||
Net revenues | $7,435 | [1] | $7,146 | [1] | $7,383 |
Operating costs and expenses: | |||||
Cost of services | 4,637 | 4,326 | 4,365 | ||
Selling, general and administrative | 1,728 | 1,704 | 1,745 | ||
Amortization of intangible assets | 94 | 79 | 75 | ||
Gain on sale of royalty rights | 0 | -474 | 0 | ||
Other operating (income) expense, net | -7 | 36 | -3 | ||
Total operating costs and expenses | 6,452 | 5,671 | 6,182 | ||
Operating income | 983 | 1,475 | 1,201 | ||
Other income (expense): | |||||
Interest expense, net | -164 | -159 | -165 | ||
Equity in earnings of equity method investees | 26 | 24 | 26 | ||
Other income, net | 4 | 8 | 6 | ||
Total non-operating expenses, net | -134 | -127 | -133 | ||
Income from continuing operations before taxes | 849 | 1,348 | 1,068 | ||
Income tax expense | 262 | 500 | 402 | ||
Income from continuing operations | 587 | [1] | 848 | [1] | 666 |
Income (loss) from discontinued operations, net of taxes | 5 | [1] | 35 | [1] | -74 |
Net income | 592 | [1] | 883 | [1] | 592 |
Less: Net income attributable to noncontrolling interests | 36 | [1] | 34 | [1] | 36 |
Net income attributable to Quest Diagnostics | 556 | [1] | 849 | [1] | 556 |
Amounts attributable to Quest Diagnostics' stockholders: | |||||
Income from continuing operations | 551 | [1] | 814 | [1] | 630 |
Income (loss) from discontinued operations, net of taxes | 5 | 35 | -74 | ||
Net income attributable to Quest Diagnostics | $556 | [1] | $849 | [1] | $556 |
Earnings per share attributable to Quest Diagnostics' common stockholders - basic: | |||||
Income from continuing operations | $3.80 | [1] | $5.35 | [1] | $3.96 |
Income (loss) from discontinued operations, per basic share | $0.03 | [1] | $0.23 | [1] | ($0.47) |
Net income | $3.83 | [1] | $5.58 | [1] | $3.49 |
Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: | |||||
Income from continuing operations | $3.78 | [1] | $5.31 | [1] | $3.92 |
Income (loss) from discontinued operations, per diluted share | $0.03 | [1] | $0.23 | [1] | ($0.46) |
Net income | $3.81 | [1] | $5.54 | [1] | $3.46 |
Dividends per common share | $1.32 | $1.20 | $0.81 | ||
[1] | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $592 | [1] | $883 | [1] | $592 |
Other comprehensive (loss) income: | |||||
Currency translation | -7 | -27 | 24 | ||
Market valuation, net of tax | -1 | -1 | 0 | ||
Net deferred loss on cash flow hedges, net of tax | -10 | 2 | 1 | ||
Other | -1 | 4 | -3 | ||
Other comprehensive (loss) income | -19 | -22 | 22 | ||
Comprehensive income | 573 | 861 | 614 | ||
Less: Comprehensive income attributable to noncontrolling interests | 36 | 34 | 36 | ||
Comprehensive income attributable to Quest Diagnostics | $537 | $827 | $578 | ||
[1] | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Cash flows from operating activities: | |||||
Net income | $592 | [1] | $883 | [1] | $592 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 314 | 283 | 287 | ||
Provision for doubtful accounts | 296 | 270 | 269 | ||
Deferred income tax provision | 23 | 19 | 7 | ||
Stock-based compensation expense | 51 | 28 | 50 | ||
Excess tax benefits from stock-based compensation arrangements | 0 | -4 | -4 | ||
Gain on sale of royalty rights | 0 | -474 | 0 | ||
Asset impairment and loss on sale of business, net | 0 | 17 | 86 | ||
Other, net | -12 | 2 | -8 | ||
Changes in operating assets and liabilities: | |||||
Accounts receivable | -312 | -247 | -243 | ||
Accounts payable and accrued expenses | 68 | -21 | -13 | ||
Income taxes payable | -84 | -93 | 100 | ||
Termination of interest rate swap agreements | 0 | 0 | 72 | ||
Other assets and liabilities, net | 2 | -11 | -8 | ||
Net cash provided by operating activities | 938 | 652 | 1,187 | ||
Cash flows from investing activities: | |||||
Business acquisitions, net of cash acquired | -728 | -213 | -51 | ||
Proceeds from sale of businesses | 0 | 296 | 0 | ||
Proceeds from sale of royalty rights | 0 | 474 | 0 | ||
Capital expenditures | -308 | -231 | -182 | ||
Decrease in investments and other assets | 11 | 2 | 16 | ||
Net cash (used in) provided by investing activities | -1,025 | 328 | -217 | ||
Cash flows from financing activities: | |||||
Proceeds from borrowings | 2,018 | 896 | 715 | ||
Repayments of debt | -1,647 | -900 | -1,369 | ||
Purchases of treasury stock | -132 | -1,037 | -200 | ||
Exercise of stock options | 78 | 138 | 162 | ||
Excess tax benefits from stock-based compensation arrangements | 0 | 4 | 4 | ||
Dividends paid | -187 | -185 | -108 | ||
Distributions to noncontrolling interests | -31 | -32 | -38 | ||
Other financing activities, net | -7 | 10 | 12 | ||
Net cash provided by (used in) financing activities | 92 | -1,106 | -822 | ||
Net change in cash and cash equivalents | 5 | -126 | 148 | ||
Change in cash and cash equivalents included in current assets held for sale | 0 | 17 | -17 | ||
Cash and cash equivalents, beginning of year | 187 | 296 | 165 | ||
Cash and cash equivalents, end of year | $192 | $187 | $296 | ||
[1] | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive (loss) Income | Treasury Stock, at Cost | Non-controlling Interests | |
In Millions | ||||||||
Balance, value at Dec. 31, 2011 | $3,715 | $2 | $2,347 | $4,264 | ($8) | ($2,912) | $22 | |
Balance, shares at Dec. 31, 2011 | 157 | |||||||
Net income | 592 | 556 | 36 | |||||
Other comprehensive (loss) income, net of tax | 22 | 22 | ||||||
Dividends declared | -130 | -130 | ||||||
Distributions to noncontrolling interests | -38 | -38 | ||||||
Issuance of common stock under benefit plans, value | 21 | 4 | 17 | |||||
Issuance of common stock under benefit plans, shares | 1 | |||||||
Stock-based compensation expense | 50 | 46 | 4 | |||||
Exercise of stock options, value | 162 | -15 | 177 | |||||
Exercise of stock options, shares | 3 | |||||||
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, value | -20 | -20 | ||||||
Tax benefits associated with stock-based compensation plans | 9 | 9 | ||||||
Purchases of treasury stock, value | -200 | -200 | ||||||
Purchases of treasury stock, shares | -3 | |||||||
Other | 3 | 3 | ||||||
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 | 883 | [1] | 849 | 34 | ||||
Other comprehensive (loss) income, net of tax | -22 | -22 | ||||||
Dividends declared | -181 | -181 | ||||||
Distributions to noncontrolling interests | -32 | -32 | ||||||
Issuance of common stock under benefit plans, value | 20 | 3 | 17 | |||||
Issuance of common stock under benefit plans, shares | 1 | |||||||
Stock-based compensation expense | 28 | 24 | 4 | |||||
Exercise of stock options, value | 138 | -9 | 147 | |||||
Exercise of stock options, shares | 3 | |||||||
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, value | -11 | -11 | ||||||
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, shares | 1 | |||||||
Tax benefits associated with stock-based compensation plans | 1 | 1 | ||||||
Purchases of treasury stock, value | -1,037 | -1,037 | ||||||
Purchases of treasury stock, shares | -17 | |||||||
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 | 592 | [1] | 556 | 36 | ||||
Other comprehensive (loss) income, net of tax | -19 | -19 | ||||||
Dividends declared | -191 | -191 | ||||||
Distributions to noncontrolling interests | -31 | -31 | ||||||
Issuance of common stock under benefit plans, value | 19 | 2 | 17 | |||||
Issuance of common stock under benefit plans, shares | 1 | |||||||
Stock-based compensation expense | 51 | 48 | 3 | |||||
Exercise of stock options, value | 78 | -2 | 80 | |||||
Exercise of stock options, shares | 1.5 | 1 | ||||||
Shares to cover employee payroll tax withholdings on stock issued under benefit plans, value | -6 | -6 | ||||||
Tax benefits associated with stock-based compensation plans | -3 | -3 | ||||||
Purchases of treasury stock, value | -132 | -132 | ||||||
Purchases of treasury stock, shares | -2 | |||||||
Other | -1 | -1 | ||||||
Balance, value at Dec. 31, 2014 | $4,330 | $2 | $2,418 | $5,723 | ($27) | ($3,815) | $29 | |
Balance, shares at Dec. 31, 2014 | 144 | |||||||
[1] | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). |
DESCRIPTION_OF_BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 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 ("IDNs"), health plans, accountable care organizations ("ACOs"), 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, Company-owned patient service centers and phlebotomists in physician offices. The Company is the leading provider of DIS, including routine testing, esoteric, gene-based testing and anatomic pathology testing. The Company provides interpretive consultation through one of the largest medical and scientific staffs 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 as well as a leading provider of central laboratory 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. | |
During 2014, Quest Diagnostics processed approximately 156 million test requisitions through its extensive laboratory network. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||
Principles of Consolidation | ||||||||
The consolidated financial statements include the accounts of all entities controlled by the Company through its direct or indirect ownership of a majority voting interest and the accounts of any variable interest entities ("VIEs") where the Company is subject to a majority of the risk of loss from the variable interest entity's activities, or entitled to receive a majority of the entity's residual returns, or both. The Company assesses the requirements related to the consolidation of VIEs, including a qualitative assessment of power and economics that considers which entity has the power to direct the activities that “most significantly impact” the VIEs economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to, the VIE. The Company's relationships with VIEs were not material at both December 31, 2014 and 2013. Investments in entities which the Company does not control, but in which it has a substantial ownership interest (generally between 20% and 49%) and can exercise significant influence, are accounted for using the equity method of accounting. At December 31, 2014 and 2013, the Company's investments in affiliates accounted for under the equity method of accounting totaled $46 million and $45 million, respectively. The Company's share of equity earnings from investments in affiliates, accounted for under the equity method, totaled $26 million, $24 million and $26 million for 2014, 2013 and 2012, respectively. All significant intercompany accounts and transactions are eliminated in consolidation. | ||||||||
Basis of Presentation | ||||||||
The Company completed the sale of its OralDNA salivary-diagnostics business ("OralDNA") during the fourth quarter of 2012. In addition, in December 2012, the Company committed to a plan to sell its HemoCue diagnostics products business ("HemoCue"). In April 2013, the Company completed the sale of HemoCue. The accompanying consolidated statements of operations and related disclosures have been recast to report the results of OralDNA and HemoCue as discontinued operations for all periods presented. Discontinued operations also includes the operations of NID, a test kit manufacturing subsidiary, which was reported as a discontinued operation in 2006. See Note 18 for a further discussion of discontinued operations. | ||||||||
The Company completed the sale of its Enterix colorectal cancer screening test business (“Enterix”) in September 2013. The Enterix business was not reclassified to discontinued operations due to the level of continuing involvement in the Enterix business subsequent to its sale. See Note 6 for a further discussion of the sale of Enterix. | ||||||||
Use of Estimates | ||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“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. | ||||||||
Revenue Recognition | ||||||||
The Company primarily recognizes revenue for services rendered upon completion of the testing process. Billings for services reimbursed by third-party payers, including Medicare and Medicaid, are recorded as revenues net of allowances for differences between amounts billed and the estimated receipts from such payers. Adjustments to the allowances, based on actual receipts from the third-party payers, are recorded upon settlement. Billings to the Medicare and Medicaid programs were approximately 17%, 18% and 19% of the Company's consolidated net revenues for the years ended December 31, 2014, 2013 and 2012, respectively. Under capitated arrangements with healthcare insurers, the Company recognizes revenue based on a predetermined monthly reimbursement rate for each member of an insurer's health plan regardless of the number or cost of services provided by the Company. In 2014, 2013 and 2012, approximately 3% of the Company's consolidated net revenues were generated under capitated arrangements. | ||||||||
Revenues from the Company's risk assessment services, clinical trials testing, healthcare information technology | ||||||||
and diagnostics products businesses are recognized when persuasive evidence of a final agreement exists; delivery has occurred or services have been rendered; the price of the product or service is fixed or determinable; and collectibility from the customer is reasonably assured. | ||||||||
Taxes on Income | ||||||||
The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Current and deferred income taxes are measured based on the tax laws that are enacted as of the balance sheet date of the relevant reporting period. Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Tax benefits from uncertain tax positions are recognized only if the tax position is more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the position. | ||||||||
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 (“ELTIP”) and its Amended and Restated Non-Employee Director Long-Term Incentive Plan (“DLTIP”). 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. | ||||||||
Stock-Based Compensation | ||||||||
The Company records stock-based compensation as a charge to earnings net of the estimated impact of forfeited awards. As such, the Company recognizes stock-based compensation cost only for those stock-based awards that are estimated to ultimately vest over their requisite service period, based on the vesting provisions of the individual grants. The cumulative effect on current and prior periods of a change in the estimated forfeiture rate is recognized as compensation cost in earnings in the period of the change. The terms of the Company's performance share unit grants allow the recipients of such awards to earn a variable number of shares based on the achievement of the performance goals specified in the awards. Stock-based compensation expense associated with performance share units is recognized based on management's best estimates of the achievement of the performance goals specified in such awards and the resulting number of shares that will be earned. The cumulative effect on current and prior periods of a change in the estimated number of performance share units expected to be earned is recognized as compensation cost in earnings in the period of the change. The Company recognizes stock-based compensation expense related to the Company's Amended Employee Stock Purchase Plan (“ESPP”) based on the 15% discount at purchase. See Note 16 for a further discussion of stock-based compensation. | ||||||||
Fair Value Measurements | ||||||||
The Company determines fair value measurements used in its consolidated financial statements based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs, as determined by either the principal market or the most advantageous market. | ||||||||
Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest. | ||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities. | ||||||||
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. | ||||||||
Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable. | ||||||||
Foreign Currency | ||||||||
The Company predominately uses the U.S. dollar as its functional currency. The functional currency of the Company's foreign subsidiaries generally is the applicable local currency. Assets and liabilities denominated in non-U.S. dollars are translated into U.S. dollars at exchange rates as of the end of the reporting period. Income and expense items are translated at average exchange rates prevailing during the year. The translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Gains and losses from foreign currency transactions are included within other operating (income) expense, net in the consolidated statements of operations. Transaction gains and losses have historically not been material. The Company may be exposed to market risk for changes in foreign exchange rates primarily under certain intercompany receivables and payables. From time to time, the Company uses foreign exchange forward contracts to mitigate the exposure of the eventual net cash inflows or outflows resulting from these intercompany transactions. As a result of the HemoCue disposition, this foreign currency risk has largely been eliminated. The Company's remaining foreign exchange exposure is not material to the Company's consolidated financial condition. The Company does not hedge its net investment in non-U.S. subsidiaries because it views those investments as long term in nature. | ||||||||
Cash and Cash Equivalents | ||||||||
Cash and cash equivalents include all highly-liquid investments with original maturities, at the time acquired by the Company, of three months or less. | ||||||||
Concentration of Credit Risk | ||||||||
Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash, cash equivalents, short-term investments, accounts receivable and derivative financial instruments. The Company's policy is to place its cash, cash equivalents and short-term investments in highly-rated financial instruments and institutions. Concentration of credit risk with respect to accounts receivable is mitigated by the diversity of the Company's payers and their dispersion across many different geographic regions, and is limited to certain payers who are large buyers of the Company's services. To reduce risk, the Company routinely assesses the financial strength of these payers and, consequently, believes that its accounts receivable credit risk exposure, with respect to these payers, is limited. While the Company has receivables due from federal and state governmental agencies, the Company does not believe that such receivables represent a credit risk since the related healthcare programs are funded by federal and state governments, and payment is primarily dependent on submitting appropriate documentation. At December 31, 2014 and 2013, receivables due from government payers under the Medicare and Medicaid programs represent approximately 14% and 13%, respectively, of the Company's consolidated net accounts receivable. The portion of the Company's accounts receivable due from patients comprises the largest portion of credit risk. At December 31, 2014 and 2013, receivables due from patients represent approximately 17% and 18%, respectively, of the Company's consolidated net accounts receivable. The Company applies assumptions and judgments including historical collection experience for assessing collectibility and determining allowances for doubtful accounts for accounts receivable from patients. | ||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ||||||||
Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectibility of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues which may impact the collectibility of these receivables or reserve estimates. Changes to the allowances for doubtful accounts estimates are recorded as an adjustment to bad debt expense within selling, general and administrative expenses. Receivables deemed to be uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written-off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. | ||||||||
Inventories | ||||||||
Inventories, which consist principally of testing supplies and reagents, are valued at the lower of cost (first in, first out method) or market. | ||||||||
Property, Plant and Equipment | ||||||||
Property, plant and equipment is recorded at cost. Major renewals and improvements are capitalized, while maintenance and repairs are expensed as incurred. Costs incurred for computer software developed or obtained for internal use are capitalized for application development activities and expensed as incurred for preliminary project activities and post-implementation activities. Capitalized costs include external direct costs of materials and services consumed in developing or obtaining internal-use software, payroll and payroll-related costs for employees who are directly associated with the internal-use software project, and interest costs incurred, when material, while developing internal-use software. Capitalization of such costs ceases when the project is substantially complete and ready for its intended purpose. Costs for maintenance and training are expensed as incurred. The Company capitalizes interest on borrowings during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is amortized over the expected useful lives of the assets. Depreciation and amortization are provided on the straight-line method over expected useful asset lives as follows: buildings and improvements, ranging up to thirty-one and a half years; laboratory equipment and furniture and fixtures, ranging from three to seven years; leasehold improvements, the lesser of the useful life of the improvement or the remaining life of the building or lease, as applicable; and computer software developed or obtained for internal use, ranging from three to five years. | ||||||||
Goodwill | ||||||||
Goodwill represents the excess of the fair value of the acquiree (including the fair value of non-controlling interests) over the recognized bases of the net identifiable assets acquired and includes the future economic benefits from other assets that could not be individually identified and separately recognized. Goodwill is not amortized, but instead is periodically reviewed for impairment. | ||||||||
Intangible Assets | ||||||||
Intangible assets are recognized at fair value, as an asset apart from goodwill if the asset arises from contractual or other legal rights, or if it is separable. Intangible assets, principally representing the cost of customer related intangibles, non-competition agreements and technology acquired, are capitalized and amortized on the straight-line method over their expected useful life, which generally ranges from five to twenty years. Intangible assets with indefinite useful lives, consisting principally of acquired tradenames, are not amortized, but instead are periodically reviewed for impairment. | ||||||||
Recoverability and Impairment of Goodwill | ||||||||
The Company reviews goodwill periodically for impairment and an impairment charge is recorded in the periods in which the recorded carrying value of goodwill is more than its implied fair value. The goodwill test is performed at least annually, or more frequently, in the case of other events that indicate a potential impairment. | ||||||||
The annual impairment test includes an option to perform a qualitative assessment of whether it is more-likely-than-not that a reporting unit's fair value is less than its carrying value prior to, or as an alternative to, performing the two-step quantitative goodwill impairment test. The quantitative impairment test is a two-step process that begins with the estimation of the fair value of the reporting unit. The first step screens for potential impairment and the second step measures the amount of the impairment, if any. The fair value of the reporting unit is based upon a discounted cash flows analysis that converts future cash flow amounts into a single discounted present value amount. This approach includes several unobservable inputs related to the Company's own assumptions. The assumptions and estimates used in the discounted cash flows model are based upon the best available information in the circumstances and include a forecast of expected future cash flows, long-term growth rates, discount rates that are commensurate with economic risks, assumed income tax rates and estimates of capital expenditures and working capital. The discount rate that is used considers a weighted average cost of capital plus an appropriate risk premium based upon the reporting unit being valued. Management's analysis also considers publicly available information regarding the market capitalization of the Company as well as (i) the financial projections and future prospects of the Company's business, including its growth opportunities and likely operational improvements, and (ii) comparable sales prices, if available. Management believes its estimation methods are reasonable and reflective of common valuation practices. As part of the first step to assess potential impairment, management compares the estimate of fair value for the reporting unit to the book value of the reporting unit. If the book value is greater than the estimate of fair value, the Company would then proceed to the second step to measure the impairment, if any. The second step compares the implied fair value of goodwill with its carrying value. The implied fair value is determined by allocating the fair value of the reporting unit to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. If the carrying amount of the reporting unit's goodwill is greater than its implied fair value, an impairment loss will be recognized in the amount of the excess. | ||||||||
On a quarterly basis, management performs a review of the Company's business to determine if events or changes in circumstances have occurred which could have a material adverse effect on the fair value of the Company and its goodwill. If such events or changes in circumstances were deemed to have occurred, the Company would perform an impairment test of goodwill as of the end of the quarter, consistent with the annual impairment test, and record any noted impairment loss. | ||||||||
Based upon the Company’s most recent annual impairment test completed during the fourth quarter of the fiscal year ended December 31, 2014, the Company concluded that goodwill was not impaired. | ||||||||
Recoverability and Impairment of Intangible Assets and Other Long-Lived Assets | ||||||||
The Company reviews indefinite-lived intangible assets periodically for impairment and an impairment charge is recorded in the periods in which the recorded carrying value of indefinite-lived intangibles is more than its estimated fair value. The indefinite-lived intangible asset impairment test is performed at least annually, or more frequently in the case of other events that indicate a potential impairment. | ||||||||
Based upon the Company’s most recent annual impairment test completed during the fourth quarter of the fiscal year ended December 31, 2014, the Company concluded that indefinite-lived intangible assets were not impaired. | ||||||||
The Company reviews the recoverability of its long-lived assets (including amortizable intangible assets), other than goodwill and indefinite-lived intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. Evaluation of possible impairment is based on the Company's ability to recover the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If the expected undiscounted pre-tax cash flows are less than the carrying amount of such asset, an impairment loss is recognized for the difference between the estimated fair value and carrying amount of the asset. | ||||||||
Investments | ||||||||
The Company accounts for investments in trading and available-for-sale equity securities, which are included in other assets in the consolidated balance sheets, at fair value. Both realized and unrealized gains and losses for trading securities are recorded currently in earnings as a component of non-operating expenses within other income, net in the consolidated statements of operations. Unrealized gains and losses, net of tax, for available-for-sale securities are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Recognized gains and losses for available-for-sale securities are recorded in other income, net in the consolidated statements of operations. Gains and losses on securities sold are based on the average cost method. | ||||||||
The Company periodically reviews its investments to determine whether a decline in fair value below the cost basis is other than temporary. The primary factors considered in the determination are: the length of time that the fair value of the investment is below carrying value; the financial condition, operating performance and near term prospects of the investee; and the Company's intent and ability to hold the investment for a period of time sufficient to allow for a recovery in fair value. If the decline in fair value is deemed to be other than temporary, the cost basis of the security is written down to fair value. | ||||||||
Investments at December 31, 2014 and 2013 consisted of the following: | ||||||||
2014 | 2013 | |||||||
Available-for-sale equity securities | $ | 9 | $ | — | ||||
Trading equity securities | 49 | 50 | ||||||
Cash surrender value of life insurance policies | 30 | 29 | ||||||
Other investments | 8 | 13 | ||||||
Total | $ | 96 | $ | 92 | ||||
Investments in available-for-sale equity securities consist of equity securities in public corporations. Investments in trading equity securities represent participant-directed investments of deferred employee compensation and related Company matching contributions held in trusts pursuant to the Company's supplemental deferred compensation plans (see Note 16). The Company purchases life insurance policies, with the Company named as beneficiary of the policies, for the purpose of funding a non-qualified deferred compensation program. Changes in the cash surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying investments. Other investments do not have readily determinable fair values and consist of investments in preferred and common shares of privately held companies and are accounted for under the cost method. | ||||||||
At December 31, 2014, the Company had gross unrealized gains from available-for-sale equity securities of approximately $2 million. For the years ended December 31, 2014, 2013 and 2012 gains from trading equity securities totaled $3 million, $7 million, and $5 million, respectively, and are included in other income, net. For the years ended December 31, 2014, 2013 and 2012 gains from changes in the cash surrender value of life insurance policies totaled $1 million, $3 million and $2 million, respectively, and are included in other income, net. | ||||||||
Derivative Financial Instruments | ||||||||
The Company uses derivative financial instruments to manage its exposure to market risks for changes in interest rates and, from time to time, 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. | ||||||||
The Company accounts for these derivatives as either an asset or liability measured at its fair value. The fair value is based upon model-derived valuations in which all significant inputs are observable in active markets and includes an adjustment for the credit risk of the obligor's non-performance. For a derivative instrument that has been formally designated as a fair value hedge, fair value gains or losses on the derivative instrument are reported in earnings, together with offsetting fair value gains or losses on the hedged item that are attributable to the risk being hedged. For derivatives that have been formally designated as a cash flow hedge, the effective portion of changes in the fair value of the derivatives is recorded in accumulated other comprehensive loss and the ineffective portion is recorded in earnings. Upon maturity or early termination of an effective interest rate swap designated as a cash flow hedge, unrealized gains or losses are deferred in stockholders' equity, as a component of accumulated other comprehensive loss, and are amortized as an adjustment to interest expense over the period during which the hedged forecasted transaction affects earnings, which is when the Company recognizes interest expense on the hedged cash flows. At inception and quarterly thereafter, the Company formally assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. All components of each derivative financial instrument's gain or loss are included in the assessment of hedge effectiveness. If it is determined that a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting and any deferred gains or losses related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive loss, unless it is probable that the forecasted transaction will not occur. If it is probable that the forecasted transaction will not occur by the originally specified time period, the Company discontinues hedge accounting, and any deferred gains or losses reported in accumulated other comprehensive loss are classified into earnings immediately. | ||||||||
Comprehensive Income (Loss) | ||||||||
Comprehensive income (loss) encompasses all changes in stockholders' equity (except those arising from transactions with stockholders) and includes net income, net unrealized gains or losses on available-for-sale securities, foreign currency translation adjustments and deferred gains and losses related to certain derivative financial instruments (see Note 15). | ||||||||
New Accounting Standards | ||||||||
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 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 operations, financial position, cash flows and disclosures will be assessed as part of any future disposal activity. | ||||||||
In May 2014, the FASB issued an ASU on revenue recognition. This ASU outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific guidance from GAAP. The core principle of the revenue recognition standard is to require an entity to recognize as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods or services as it transfers control to its customers. The standard requires additional disclosures including those that are qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This ASU is effective for the Company in the first quarter of 2017 with the option of using a full retrospective method or a modified retrospective method. The Company is currently assessing the impact of the adoption of this ASU on the Company’s results of operations, financial position and cash flows. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | ||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE | |||||||||||
The computation of basic and diluted earnings per common share is as follows (in millions, except per share data): | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Amounts attributable to Quest Diagnostics’ stockholders: | ||||||||||||
Income from continuing operations | $ | 551 | $ | 814 | $ | 630 | ||||||
Income (loss) from discontinued operations, net of taxes | 5 | 35 | (74 | ) | ||||||||
Net income attributable to Quest Diagnostics’ common stockholders | $ | 556 | $ | 849 | $ | 556 | ||||||
Income from continuing operations | $ | 551 | $ | 814 | $ | 630 | ||||||
Less: Earnings allocated to participating securities | 2 | 3 | 2 | |||||||||
Earnings available to Quest Diagnostics’ common stockholders – basic and diluted | $ | 549 | $ | 811 | $ | 628 | ||||||
Weighted average common shares outstanding – basic | 145 | 152 | 159 | |||||||||
Effect of dilutive securities: | ||||||||||||
Stock options and performance share units | — | 1 | 1 | |||||||||
Weighted average common shares outstanding – diluted | 145 | 153 | 160 | |||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – basic: | ||||||||||||
Income from continuing operations | $ | 3.8 | $ | 5.35 | $ | 3.96 | ||||||
Income (loss) from discontinued operations | 0.03 | 0.23 | (0.47 | ) | ||||||||
Net income | $ | 3.83 | $ | 5.58 | $ | 3.49 | ||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – diluted: | ||||||||||||
Income from continuing operations | $ | 3.78 | $ | 5.31 | $ | 3.92 | ||||||
Income (loss) from discontinued operations | 0.03 | 0.23 | (0.46 | ) | ||||||||
Net income | $ | 3.81 | $ | 5.54 | $ | 3.46 | ||||||
The following securities were not included in the calculation of diluted earnings per share due to their antidilutive effect: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Stock options and performance share units | 2 | 1 | 2 | |||||||||
RESTRUCTURING_ACTIVITIES
RESTRUCTURING ACTIVITIES | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||
RESTRUCTURING ACTIVITIES | 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 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: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Employee separation costs | $ | 31 | $ | 69 | $ | 57 | ||||||
Facility-related costs | 12 | 6 | 1 | |||||||||
Asset impairment charges | 1 | — | 1 | |||||||||
Accelerated vesting of stock-based compensation | — | 1 | 2 | |||||||||
Total restructuring charges | $ | 44 | $ | 76 | $ | 61 | ||||||
Total restructuring charges incurred in the year ended December 31, 2014 are primarily associated with various workforce reduction initiatives as the Company continues to simplify and restructure its organization. Of the total $44 million in restructuring charges incurred during the year ended December 31, 2014, $21 million and $23 million were recorded in cost of services and selling, general and administrative expenses, respectively. | ||||||||||||
Total restructuring charges incurred for the year ended December 31, 2013 included $29 million of employee separation costs associated with various workforce reduction initiatives aimed at centralizing certain support functions, $20 million associated with the Company's management layer reduction initiative, $16 million associated with the outsourcing of certain aspects of the Company's support functions and $4 million associated with the Company's voluntary retirement program. Of the total $76 million in restructuring charges incurred during the year ended December 31, 2013, $27 million and $49 million were recorded in cost of services and selling, general and administrative expenses, respectively. | ||||||||||||
Total restructuring charges incurred during the year ended December 31, 2012 included $45 million of employee separation costs incurred under the Company's voluntary retirement program and $12 million of employee separation costs associated with various workforce reduction initiatives. Of the total $61 million in restructuring charges incurred during the year ended December 31, 2012, $37 million and $24 million were recorded in cost of services and selling, general and administrative expenses, respectively. | ||||||||||||
Charges for all periods presented were primarily recorded in the Company's DIS business. | ||||||||||||
The following table summarizes the activity of the restructuring liability as of December 31, 2014 and 2013, which is included in accrued expenses in Note 12: | ||||||||||||
Employee Separation Costs | Facility-Related Costs | Total | ||||||||||
Balance, December 31, 2012 | $ | 40 | $ | — | $ | 40 | ||||||
Income statement expense | 69 | 6 | 75 | |||||||||
Cash payments | (81 | ) | (1 | ) | (82 | ) | ||||||
Other / adjustments | 3 | — | 3 | |||||||||
Balance, December 31, 2013 | 31 | 5 | 36 | |||||||||
Income statement expense | 31 | 12 | 43 | |||||||||
Cash payments | (44 | ) | (6 | ) | (50 | ) | ||||||
Balance, December 31, 2014 | $ | 18 | $ | 11 | $ | 29 | ||||||
BUSINESS_ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Business Combinations [Abstract] | ||||||||||||
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS | |||||||||||
2014 Acquisitions | ||||||||||||
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. The final consideration paid is subject to post closing adjustments related to working capital. 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 year ended December 31, 2014, Solstas contributed $300 million to the Company's consolidated net revenues and $294 million to operating expenses which includes approximately $17 million of restructuring, integration and transaction related costs. Of the $17 million of restructuring, integration and transaction related costs recorded for the year ended December 31, 2014, $4 million and $13 million were in cost of services and selling, general and administrative expenses, respectively. | ||||||||||||
Acquisition of Summit Health, Inc. | ||||||||||||
On April 18, 2014, the Company completed its acquisition of Summit Health, Inc. ("Summit Health") for $152 million, which consisted of cash consideration of $125 million (which includes $10 million of working capital adjustments), or $124 million net of cash acquired, estimated contingent consideration of $22 million, and $5 million associated with certain transaction related costs due to the sellers of Summit Health. The contingent consideration arrangement is dependent on the achievement of certain revenue targets in 2015 and the Company could pay up to $25 million in 2016 based on the achievement of such targets. Based on the 2015 revenue forecast for Summit Health, the Company decreased the estimated contingent consideration accrual to $13 million, resulting in a $9 million gain recorded in other operating (income) expense, net. Through the acquisition, the Company acquired all of Summit Health's operations. Summit is a provider of on-site prevention and wellness programs. For further details regarding the fair value of the estimated contingent consideration associated with the Summit Health acquisition, see Note 7. | ||||||||||||
Acquisition of Steward Health Care Systems, LLC | ||||||||||||
On April 16, 2014, the Company completed the acquisition of the outreach laboratory service operations of Steward Health Care Systems, LLC ("Steward") for $34 million, which consisted of cash consideration of $30 million and contingent consideration of $4 million. The assets acquired primarily represent goodwill and intangible assets, principally comprised of customer-related intangibles (see Note 11). The deferred consideration arrangement secures the seller's compliance with a non-compete agreement under which the Company will pay up to $5 million, ratably, over the next four years provided the non-compete agreement is not violated through 2018. For further details regarding the fair value of the estimated contingent consideration associated with the Steward acquisition, see Note 7. | ||||||||||||
2013 Acquisitions | ||||||||||||
During 2013, the Company completed four acquisitions for a total purchase price of $264 million, or $213 million net of cash acquired and deferred consideration associated with the UMass acquisition. | ||||||||||||
Acquisition of UMass Memorial Medical Center | ||||||||||||
On January 2, 2013, the Company completed the acquisition of the clinical outreach and anatomic pathology businesses of UMass Memorial Medical Center ("UMass"). The purchase price included $50 million of deferred consideration that is included in accounts payable and accrued expenses at December 31, 2014. This purchase was the first step in a series of transactions between the parties whereby the two organizations expect to eventually have a financial stake in a new entity that will perform diagnostic information testing services in a defined territory within the state of Massachusetts. The assets acquired at the acquisition date primarily represent goodwill and intangible assets, principally comprised of customer-related intangibles (see Note 11). In addition the Company granted to UMass a call option and UMass granted to the Company a put option for UMass to acquire an 18.90% equity interest in a newly formed entity. The put and call options have a remaining vesting period of approximately 4 months (see Note 7). | ||||||||||||
Acquisition of Advanced Toxicology Network | ||||||||||||
On May 15, 2013, the Company completed the acquisition of the toxicology and clinical laboratory business of Advanced Toxicology Network ("ATN") from Concentra, a subsidiary of Humana Inc. The assets acquired at the acquisition date primarily represent goodwill and intangible assets, principally comprised of customer-related intangibles (see Note 11). | ||||||||||||
Acquisition of Dignity Health | ||||||||||||
On June 22, 2013, the Company completed the acquisition of certain lab-related clinical outreach service operations of Dignity Health ("Dignity"), a hospital system in California. The assets acquired at the acquisition date primarily represent goodwill and intangible assets, principally comprised of customer-related intangibles (see Note 11). | ||||||||||||
Acquisition of ConVerge Diagnostics, LLC | ||||||||||||
On October 7, 2013, the Company completed the acquisition of ConVerge Diagnostic Services, LLC ("ConVerge"). ConVerge is a leading full-service laboratory providing clinical, cytology and anatomic pathology testing services to patients, physicians and hospitals in New England. The assets acquired at the acquisition date primarily represent goodwill and intangible assets, principally comprised of customer-related intangibles (see Note 11). | ||||||||||||
2012 Acquisition | ||||||||||||
Acquisition of S.E.D. Medical Laboratories | ||||||||||||
On January 6, 2012, the Company completed the acquisition of S.E.D. Medical Laboratories ("S.E.D.") from Lovelace Health System for approximately $51 million. The assets acquired at the acquisition date primarily represent goodwill and intangible assets, principally comprised of customer-related intangibles (see Note 11). | ||||||||||||
Total Consideration, Assets Acquired and Liabilities Assumed | ||||||||||||
The acquisitions described above were 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 allocations related to the Solstas and Summit Health acquisitions are based upon the Company's preliminary estimates and assumptions that are subject to change within the measurement period. Management is currently in the process of verifying data and finalizing information related to certain liabilities and the corresponding effect on the amount of goodwill. All of the goodwill acquired in connection with the Solstas, Summit Health, Steward, UMass, ATN, Dignity, ConVerge and S.E.D. acquisitions has been allocated to the Company's DIS business. | ||||||||||||
The following tables summarize the total consideration and the preliminary amounts of assets acquired and liabilities assumed for Solstas and Summit Health described above: | ||||||||||||
Solstas | Summit Health | |||||||||||
Cash | $ | 572 | $ | 125 | ||||||||
Estimated fair value of contingent consideration | — | 22 | ||||||||||
Transaction related costs due to sellers | — | 5 | ||||||||||
Total consideration | $ | 572 | $ | 152 | ||||||||
Solstas | Summit Health | |||||||||||
Allocation of purchase price: | Fair Value | Weighted Average Useful Life (in years) | Fair Value | Weighted Average Useful Life (in years) | ||||||||
Cash and cash equivalents | $ | 9 | $ | 1 | ||||||||
Accounts receivable, net | 48 | 9 | ||||||||||
Current deferred income taxes | 7 | — | ||||||||||
Other current assets | 12 | 16 | ||||||||||
Property, plant and equipment, net | 49 | 6 | ||||||||||
Goodwill | 270 | 92 | ||||||||||
Intangible assets: | ||||||||||||
Customer relationships | 203 | 20 | 33 | 15 | ||||||||
Tradename | 7 | 2 | 2 | 1 | ||||||||
Software | — | 3 | 4 | |||||||||
Total intangible assets | 210 | 38 | ||||||||||
Non-current deferred income taxes | 42 | — | ||||||||||
Total assets acquired | 647 | 162 | ||||||||||
Current liabilities | 63 | 10 | ||||||||||
Non-current deferred income taxes | 4 | — | ||||||||||
Other non-current liabilities | 8 | — | ||||||||||
Total liabilities assumed | 75 | 10 | ||||||||||
Net assets acquired | $ | 572 | $ | 152 | ||||||||
The goodwill recorded as part of the Solstas and Summit Health acquisitions 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 acquisitions of Solstas and Summit Health had occurred as of January 1, 2013. The unaudited pro forma information includes adjustments primarily related to the amortization of intangible assets acquired, interest expense associated with debt extinguished prior to the acquisitions, and transaction costs related to the Solstas and Summit Health acquisitions. The unaudited pro forma combined financial information does not include the estimated annual synergies expected to be realized upon completion of the integration of Solstas and Summit Health and is not indicative of the results of operations as they would have been had the transaction been effected on the assumed date. Pre-acquisition financial information for ATN, Dignity, ConVerge and Steward has not been included in the table below as these acquisitions were not material to the Company’s consolidated financial statements. | ||||||||||||
2014 | 2013 | |||||||||||
(unaudited) | ||||||||||||
Pro forma net revenues | $ | 7,520 | $ | 7,622 | ||||||||
Pro forma income from continuing operations | $ | 585 | $ | 855 | ||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: | ||||||||||||
Pro forma income from continuing operations | $ | 3.79 | $ | 5.4 | ||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: | ||||||||||||
Pro forma income from continuing operations | $ | 3.77 | $ | 5.36 | ||||||||
DISPOSITIONS
DISPOSITIONS | 12 Months Ended |
Dec. 31, 2014 | |
Disposal Groups [Abstract] | |
DISPOSITIONS | DISPOSITIONS |
Sale of Royalty Rights | |
As part of its acquisition of Celera in 2011, the Company gained rights to receive royalties on ibrutinib, an experimental cancer therapy. In July 2013, the Company sold its right to receive royalties related to the commercialization of ibrutinib for $485 million in cash. The Company has accounted for this transaction as a sale of royalty rights and recognized a pre-tax gain of $474 million, net of transaction costs, associated with this sale. | |
Sale of Enterix | |
In September 2013, the Company completed the sale of Enterix and recorded a pre-tax loss of approximately $40 million associated with the sale, which is included in other operating (income) expense, net. The Enterix business was not reclassified to discontinued operations due to the level of continuing involvement in the Enterix business subsequent to its sale. The continuing involvement relates to a minimum purchase agreement between the acquiror of the Enterix business and the Company. | |
Sale of HemoCue | |
In April 2013, the Company completed the sale of HemoCue and recorded an after-tax gain of $14 million (including foreign currency translation adjustments, partially offset by income tax expense and transaction costs), which is included in discontinued operations in 2013. For further details regarding the sale of HemoCue, see Note 18. | |
Sale of OralDNA | |
The Company completed the sale of OralDNA in December 2012. For further details regarding the sale of OralDNA, see Note 18. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended | |||||||||||||||
Dec. 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 | ||||||||||||||||
December 31, 2014 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 49 | $ | 49 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 30 | — | 30 | — | ||||||||||||
Interest rate swaps | 17 | — | 17 | — | ||||||||||||
Available-for-sale equity securities | 9 | 9 | — | — | ||||||||||||
Put Option | 1 | — | — | 1 | ||||||||||||
Total | $ | 106 | $ | 58 | $ | 47 | $ | 1 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 85 | $ | — | $ | 85 | $ | — | ||||||||
Contingent consideration | 17 | — | — | 17 | ||||||||||||
Forward starting interest rate swaps | 15 | — | 15 | — | ||||||||||||
Interest rate swaps | 13 | — | 13 | — | ||||||||||||
Call option | 5 | — | — | 5 | ||||||||||||
Total | $ | 135 | $ | — | $ | 113 | $ | 22 | ||||||||
December 31, 2013 | ||||||||||||||||
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 | ||||||||
The Company offers certain employees the opportunity to participate in non-qualified supplemental deferred compensation plans. A participant's deferrals, together with Company matching credits, are invested in a variety of participant-directed stock and bond mutual funds that are classified as trading securities. Changes in the fair value of these securities are measured using quoted prices in active markets based on the market price per unit multiplied by the number of units held exclusive of any transaction costs. A corresponding adjustment for changes in fair value of the trading securities is also reflected in the changes in fair value of the deferred compensation obligation. The deferred compensation liabilities are classified within Level 2 because their inputs are derived principally from observable market data by correlation to the trading securities. | ||||||||||||||||
The Company offers certain employees the opportunity to participate in a non-qualified deferred compensation program. A participant's deferrals, together with Company matching credits, are “invested” at the direction of the employee in a hypothetical portfolio of investments which are tracked by an administrator. The Company purchases life insurance policies, with the Company named as beneficiary of the policies, for the purpose of funding the program's liability. Changes in the cash surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying investments. Changes in the fair value of the deferred compensation obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. The cash surrender value and the deferred compensation obligations are classified within Level 2 because their inputs are derived principally from observable market data by correlation to the hypothetical investments. | ||||||||||||||||
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. | ||||||||||||||||
Investment in available-for-sale equity securities represents an investment that the Company previously accounted for under the cost method as it consisted of common shares of a privately held entity. In April 2014, the Company's investee registered its shares through an initial public offering on the Euronext Paris exchange. As a result of the initial public offering, the Company reclassified the shares to an investment in available-for-sale equity securities. The Company's investment in available-for-sale equity securities is classified within Level 1 of the fair value hierarchy because the fair value is obtained from quoted prices in an active market. | ||||||||||||||||
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 4 months and their fair values have been measured using a combination of discounted cash flows and the Black-Scholes option pricing model (see Note 5). | ||||||||||||||||
In April 2014, and as further detailed in Note 5, the Company completed the acquisitions of Steward and Summit Health. In connection with these acquisitions the Company initially recorded an aggregate contingent consideration liability of $26 million. The contingent consideration liability was classified within Level 3 measured at fair value using a probability weighted and discounted cash flow method. These measurements are based on externally obtained inputs and management's probability assessments of the occurrence of triggering events, appropriately discounted considering the uncertainties associated with the obligations, as well as the likelihood of achieving financial targets. The initial probability estimate of the occurrence of such triggering events associated with the amounts the Company could be obligated to pay in future periods for both Summit Health and Steward was between 5% and 95%. The probability-weighted cash flows were then discounted using a discount rate of 1.5% to 2.8%. During the fourth quarter of 2014, as a result of a lower revenue forecast for Summit Health in 2015, the estimated fair value of the contingent consideration accrual was reduced to $13 million. As a result, other operating (income) expense, net for the year ended December 31, 2014 includes a gain of $9 million. The contingent consideration associated with Summit Health will be paid in the first quarter of 2016, with a maximum payment of $25 million. The contingent consideration associated with Steward is projected to be paid out in four equal annual installments beginning in 2015, with a maximum payout of $5 million in total. | ||||||||||||||||
The following table provides a reconciliation of the beginning and ending balances of assets using significant unobservable inputs (Level 3): | ||||||||||||||||
Available-for-Sale Equity Securities | Put Option Derivative Asset | Total | ||||||||||||||
Balance, December 31, 2012 | $ | 1 | $ | — | $ | 1 | ||||||||||
Purchases, additions and issuances | — | 8 | 8 | |||||||||||||
Total gains (losses) - realized/ unrealized: | ||||||||||||||||
Included in earnings | — | (4 | ) | (4 | ) | |||||||||||
Included in other comprehensive income (loss) | (1 | ) | — | (1 | ) | |||||||||||
Balance, December 31, 2013 | — | 4 | 4 | |||||||||||||
Total gains (losses) - realized/ unrealized: | ||||||||||||||||
Included in earnings | — | (3 | ) | (3 | ) | |||||||||||
Balance, December 31, 2014 | $ | — | $ | 1 | $ | 1 | ||||||||||
The following table provides a reconciliation of the beginning and ending balances of liabilities using significant unobservable inputs (Level 3): | ||||||||||||||||
Contingent Consideration | Call Option Derivative Liability | Total | ||||||||||||||
Balance, December 31, 2012 | $ | — | $ | — | $ | — | ||||||||||
Purchases, additions and issuances | — | 11 | 11 | |||||||||||||
Total (gains) losses - realized/ unrealized: | ||||||||||||||||
Included in earnings | — | (3 | ) | (3 | ) | |||||||||||
Balance, December 31, 2013 | — | 8 | 8 | |||||||||||||
Purchases, additions and issuances | 26 | — | 26 | |||||||||||||
Total (gains) losses - realized/ unrealized: | ||||||||||||||||
Included in earnings | (9 | ) | (3 | ) | (12 | ) | ||||||||||
Balance, December 31, 2014 | $ | 17 | $ | 5 | $ | 22 | ||||||||||
The unrealized gains and losses associated with the change in fair value of the put option derivative asset and call option derivative liability included in earnings for the years ended December 31, 2014 and 2013 are reported in other non-operating income, net. | ||||||||||||||||
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value based on the short maturities of these instruments. At December 31, 2014, the fair value of the Company’s debt was estimated at $4.2 billion, which exceeded the carrying value by $396 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. |
TAXES_ON_INCOME
TAXES ON INCOME | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
TAXES ON INCOME | TAXES ON INCOME | |||||||||||
The Company's pre-tax income from continuing operations consisted of $836 million, $1.3 billion and $1.1 billion from U.S. operations and $13 million, $19 million and $18 million from foreign operations for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||
For the year ended December 31, 2013, pre-tax income from continuing operations in the U.S., income tax expense and the effective tax rate, including the state and local income tax rate, net of federal benefit, were impacted by the gain on sale of royalty rights. For further details regarding the sale of royalty rights, see Note 6. | ||||||||||||
The components of income tax expense from continuing operations for 2014, 2013 and 2012 were as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | 204 | $ | 417 | $ | 332 | ||||||
State and local | 34 | 59 | 61 | |||||||||
Foreign | 3 | 4 | 3 | |||||||||
Deferred: | ||||||||||||
Federal | 28 | 27 | 13 | |||||||||
State and local | (6 | ) | (6 | ) | (6 | ) | ||||||
Foreign | (1 | ) | (1 | ) | (1 | ) | ||||||
Total | $ | 262 | $ | 500 | $ | 402 | ||||||
A reconciliation of the federal statutory rate to the Company's effective tax rate for 2014, 2013 and 2012 was as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Tax provision at statutory rate | 35 | % | 35 | % | 35 | % | ||||||
State and local income taxes, net of federal benefit | 3.1 | 2.8 | 3.4 | |||||||||
Impact of foreign operations | (0.2 | ) | (0.3 | ) | (0.3 | ) | ||||||
Tax credits | (0.8 | ) | (0.4 | ) | (0.2 | ) | ||||||
Adjustments to unrecognized tax positions (the net benefit mainly results from favorable resolution of certain tax contingencies) | (4.9 | ) | 1.4 | 1.2 | ||||||||
Non-deductible expenses, primarily meals and entertainment expenses | 0.4 | 0.3 | 0.3 | |||||||||
Impact of noncontrolling interests | (1.6 | ) | (1.0 | ) | (1.3 | ) | ||||||
Other, net | (0.1 | ) | (0.7 | ) | (0.5 | ) | ||||||
Effective tax rate | 30.9 | % | 37.1 | % | 37.6 | % | ||||||
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at December 31, 2014 and 2013 were as follows: | ||||||||||||
2014 | 2013 | |||||||||||
Current deferred tax assets: | ||||||||||||
Accounts receivable reserves | $ | 91 | $ | 85 | ||||||||
Liabilities not currently deductible | 78 | 63 | ||||||||||
Total current deferred tax assets | $ | 169 | $ | 148 | ||||||||
Non-current deferred tax assets (liabilities): | ||||||||||||
Liabilities not currently deductible | $ | 138 | $ | 144 | ||||||||
Stock-based compensation | 42 | 43 | ||||||||||
Capitalized R&D expense | 3 | 6 | ||||||||||
Net operating loss carryforwards, net of valuation allowance | 165 | 114 | ||||||||||
Depreciation and amortization | (519 | ) | (475 | ) | ||||||||
Total non-current deferred tax liabilities, net | $ | (171 | ) | $ | (168 | ) | ||||||
At December 31, 2014 and 2013, non-current deferred tax assets of $33 million and $24 million, respectively, are recorded in other long-term assets in the consolidated balance sheets. At December 31, 2014 and 2013, non-current deferred tax liabilities of $204 million and $192 million, respectively, are included in other long-term liabilities in the consolidated balance sheets. | ||||||||||||
As of December 31, 2014, the Company had estimated net operating loss carryforwards for federal and state income tax purposes of $326 million and $1.4 billion, respectively, which expire at various dates through 2034. Estimated net operating loss carryforwards for foreign income tax purposes are $44 million at December 31, 2014, some of which can be carried forward indefinitely while others expire at various dates through 2023. As of December 31, 2014 and 2013, deferred tax assets associated with net operating loss carryforwards of $242 million and $140 million, respectively, have each been reduced by valuation allowances of $60 million and $34 million, respectively. | ||||||||||||
The Company has not provided U.S. federal income and foreign tax withholdings on undistributed earnings from non-U.S. subsidiaries because the Company intends to reinvest such earnings indefinitely outside the U.S. Determination of the amount of unrecognized deferred tax liability related to these earnings is not practicable. | ||||||||||||
Income taxes payable, including those classified in other long-term liabilities in the consolidated balance sheets at December 31, 2014 and 2013, were $110 million and $157 million, respectively. Prepaid income taxes were $44 million at December 31, 2014 and were included in prepaid expenses and other current assets in the consolidated balance sheets. | ||||||||||||
The total amount of unrecognized tax benefits as of and for the years ended December 31, 2014, 2013 and 2012 consisted of the following: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Balance, beginning of year | $ | 168 | $ | 199 | $ | 195 | ||||||
Additions: | ||||||||||||
For tax positions of current year | 17 | 11 | 12 | |||||||||
For tax positions of prior years | 1 | 12 | 10 | |||||||||
Reductions: | ||||||||||||
Changes in judgment | (56 | ) | (23 | ) | (2 | ) | ||||||
Expirations of statutes of limitations | (6 | ) | (2 | ) | (6 | ) | ||||||
Settlements | (2 | ) | (29 | ) | (10 | ) | ||||||
Balance, end of year | $ | 122 | $ | 168 | $ | 199 | ||||||
The contingent liabilities for tax positions primarily relate to uncertainties associated with the realization of tax benefits derived from the allocation of income and expense among state jurisdictions, the characterization and timing of certain tax deductions associated with business combinations, income and expenses associated with certain intercompany licensing arrangements, certain tax credits and the deductibility of certain settlement payments. | ||||||||||||
The total amount of unrecognized tax benefits as of December 31, 2014, that, if recognized, would affect the effective income tax rate from continuing operations is $98 million. Based upon the expiration of statutes of limitations, settlements and/or the conclusion of tax examinations, the Company believes it is reasonably possible that the total amount of unrecognized tax benefits may decrease by up to $58 million within the next twelve months. | ||||||||||||
Accruals for interest expense on contingent tax liabilities are classified in income tax expense in the consolidated statements of operations. Accruals for penalties have historically been immaterial. Interest expense included in income tax expense in each of the years ended December 31, 2014, 2013 and 2012 was approximately $(1) million, $3 million and $3 million respectively. As of both December 31, 2014 and 2013, the Company has approximately $12 million and $13 million, respectively, accrued, net of the benefit of a federal and state deduction, for the payment of interest on uncertain tax positions. | ||||||||||||
The recognition and measurement of certain tax benefits includes estimates and judgment by management and inherently involves subjectivity. Changes in estimates may create volatility in the Company's effective tax rate in future periods and may be due to settlements with various tax authorities (either favorable or unfavorable), the expiration of the statute of limitations on some tax positions and obtaining new information about particular tax positions that may cause management to change its estimates. | ||||||||||||
In the regular course of business, various federal, state, local and foreign tax authorities conduct examinations of the Company's income tax filings and the Company generally remains subject to examination until the statute of limitations expires for the respective jurisdiction. The Internal Revenue Service (“IRS”) has completed its examinations of the Company's consolidated federal income tax returns up through and including the 2011 tax year; however, the Company plans to pursue all alternatives for settlement, including litigation, for certain tax adjustments related to its 2009 tax year. At this time, the Company does not believe that there will be any material additional payments beyond its recorded contingent liability reserves that may be required as a result of these tax audits. As of December 31, 2014, a summary of the tax years that remain subject to examination, or that are under appeal, for the Company's major jurisdictions are: | ||||||||||||
United States - federal 2012 - 2014 | ||||||||||||
United States - various states 2005 - 2014 |
SUPPLEMENTAL_CASH_FLOW_OTHER_D
SUPPLEMENTAL CASH FLOW & OTHER DATA | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||
SUPPLEMENTAL CASH FLOW & OTHER DATA | SUPPLEMENTAL CASH FLOW & OTHER DATA | |||||||||||
Supplemental cash flow data for the years ended December 31, 2014, 2013 and 2012 was as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Depreciation expense | $ | 220 | $ | 204 | $ | 207 | ||||||
Amortization expense | 94 | 79 | 80 | |||||||||
Interest paid | 170 | 167 | 163 | |||||||||
Income taxes paid | 327 | 568 | 305 | |||||||||
Assets acquired under capital leases | 12 | 13 | 6 | |||||||||
Account payable associated with capital expenditures | 26 | 28 | — | |||||||||
Dividend payable | 48 | 43 | 48 | |||||||||
Businesses acquired: | ||||||||||||
Fair value of assets acquired | 853 | 280 | 51 | |||||||||
Fair value of liabilities assumed | 85 | 16 | — | |||||||||
Fair value of net assets acquired | 768 | 264 | 51 | |||||||||
Merger consideration paid (payable) | (30 | ) | (50 | ) | — | |||||||
Cash paid for business acquisitions | 738 | 214 | 51 | |||||||||
Less: Cash acquired | 10 | 1 | — | |||||||||
Business acquisitions, net of cash acquired | $ | 728 | $ | 213 | $ | 51 | ||||||
Supplemental continuing operations data for the statement of operations for the years ended December 31, 2014, 2013 and 2012 was as follows: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Depreciation expense | $ | 220 | $ | 203 | $ | 204 | ||||||
Interest expense | (167 | ) | (162 | ) | (168 | ) | ||||||
Interest income | 3 | 3 | 3 | |||||||||
Interest expense, net | $ | (164 | ) | $ | (159 | ) | $ | (165 | ) |
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT | |||||||
Property, plant and equipment at December 31, 2014 and 2013 consisted of the following: | ||||||||
2014 | 2013 | |||||||
Land | $ | 28 | $ | 30 | ||||
Buildings and improvements | 367 | 365 | ||||||
Laboratory equipment, furniture and fixtures | 1,386 | 1,248 | ||||||
Leasehold improvements | 538 | 452 | ||||||
Computer software developed or obtained for internal use | 675 | 581 | ||||||
Construction-in-progress | 132 | 130 | ||||||
3,126 | 2,806 | |||||||
Less: Accumulated depreciation and amortization | (2,193 | ) | (2,001 | ) | ||||
Total | $ | 933 | $ | 805 | ||||
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS | |||||||||||||||||||||||||
The changes in goodwill for the years ended December 31, 2014 and 2013 were as follows: | ||||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Balance, beginning of year | $ | 5,649 | $ | 5,536 | ||||||||||||||||||||||
Goodwill acquired during the year | 383 | 150 | ||||||||||||||||||||||||
Write-off associated with sale of business during the year | — | (37 | ) | |||||||||||||||||||||||
Balance, end of year | $ | 6,032 | $ | 5,649 | ||||||||||||||||||||||
Principally all of the Company’s goodwill as of December 31, 2014 and 2013 was associated with its DIS business. | ||||||||||||||||||||||||||
For the year ended December 31, 2014, goodwill acquired was principally associated with the Solstas, Summit Health and Steward acquisitions, of which $103 million is deductible for tax purposes. Acquisitions during the year also resulted in $270 million of intangible assets, principally comprised of customer-related intangibles and trade names. | ||||||||||||||||||||||||||
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. See Note 5 for further details regarding acquisitions. | ||||||||||||||||||||||||||
For the year ended December 31, 2013, the $37 million of goodwill written-off was associated with the sale of Enterix. | ||||||||||||||||||||||||||
For further details regarding the sale of Enterix, see Note 6. | ||||||||||||||||||||||||||
Intangible assets at December 31, 2014 and 2013 consisted of the following: | ||||||||||||||||||||||||||
Weighted | December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||
Amort-ization | ||||||||||||||||||||||||||
Period (Years) | ||||||||||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||||
Amortizing intangible assets: | ||||||||||||||||||||||||||
Customer-related intangibles | 18 | $ | 929 | $ | (259 | ) | $ | 670 | $ | 670 | $ | (210 | ) | $ | 460 | |||||||||||
Non-compete agreements | 4 | 43 | (37 | ) | 6 | 43 | (27 | ) | 16 | |||||||||||||||||
Technology | 14 | 118 | (38 | ) | 80 | 119 | (28 | ) | 91 | |||||||||||||||||
Other | 8 | 152 | (82 | ) | 70 | 141 | (57 | ) | 84 | |||||||||||||||||
Total | 16 | 1,242 | (416 | ) | 826 | 973 | (322 | ) | 651 | |||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||
Tradenames | 244 | — | 244 | 244 | — | 244 | ||||||||||||||||||||
Other | 1 | — | 1 | 1 | — | 1 | ||||||||||||||||||||
Total intangible assets | $ | 1,487 | $ | (416 | ) | $ | 1,071 | $ | 1,218 | $ | (322 | ) | $ | 896 | ||||||||||||
Amortization expense related to intangible assets was $94 million, $79 million and $75 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||||
The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of December 31, 2014 is as follows: | ||||||||||||||||||||||||||
Year Ending December 31, | ||||||||||||||||||||||||||
2015 | $ | 85 | ||||||||||||||||||||||||
2016 | 74 | |||||||||||||||||||||||||
2017 | 71 | |||||||||||||||||||||||||
2018 | 64 | |||||||||||||||||||||||||
2019 | 62 | |||||||||||||||||||||||||
Thereafter | 470 | |||||||||||||||||||||||||
Total | $ | 826 | ||||||||||||||||||||||||
For the year ended December 31, 2013, intangible assets associated with the sale of Enterix with a net book value of $6 million (original cost of $14 million and accumulated amortization of $8 million) were written-off. For further details regarding the sale of Enterix, see Note 6. |
ACCOUNTS_PAYABLE_AND_ACCRUED_E
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ||||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |||||||
Accounts payable and accrued expenses at December 31, 2014 and 2013 consisted of the following: | ||||||||
2014 | 2013 | |||||||
Trade accounts payable | $ | 257 | $ | 258 | ||||
Accrued wages and benefits, including incentive compensation | 364 | 283 | ||||||
Income taxes payable | 63 | 7 | ||||||
Accrued interest | 67 | 61 | ||||||
Accrued insurance | 59 | 30 | ||||||
Merger consideration payable | 56 | 1 | ||||||
Dividend payable | 48 | 43 | ||||||
Accrued expenses | 277 | 237 | ||||||
Total | $ | 1,191 | $ | 920 | ||||
DEBT
DEBT | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Instruments [Abstract] | ||||||||
DEBT | DEBT | |||||||
Long-term debt at December 31, 2014 and 2013 consisted of the following: | ||||||||
2014 | 2013 | |||||||
Floating Rate Senior Notes due March 2014 (bearing interest at three-month LIBOR plus 0.85%) | $ | — | $ | 200 | ||||
5.45% Senior Notes due November 2015 | 500 | 500 | ||||||
3.20% Senior Notes due April 2016 | 304 | 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 | 524 | 520 | ||||||
4.70% Senior Notes due April 2021 | 549 | 533 | ||||||
4.25% Senior Notes due April 2024 | 311 | — | ||||||
6.95% Senior Notes due July 2037 | 421 | 421 | ||||||
5.75% Senior Notes due January 2040 | 439 | 439 | ||||||
Other | 39 | 37 | ||||||
Total long-term debt | 3,762 | 3,332 | ||||||
Less: current portion of long-term debt | 518 | 212 | ||||||
Total long-term debt, net of current portion | $ | 3,244 | $ | 3,120 | ||||
Secured Receivables Credit Facility | ||||||||
The Company has a $525 million secured receivables credit facility (the “Secured Receivables Credit Facility”) which was renewed in December 2014 and matures on December 5, 2016. Interest on the Secured Receivables Credit Facility is based on rates that are intended to approximate commercial paper rates for highly-rated issuers. At both December 31, 2014 and 2013, the Company's borrowing rate under the Secured Receivables Credit Facility was 0.86%. Borrowings under the Secured Receivables Credit Facility are collateralized by certain domestic receivables. At both December 31, 2014 and 2013, there were no outstanding borrowings under the Secured Receivables Credit Facility. | ||||||||
Senior Unsecured Revolving Credit Facility | ||||||||
In April 2014, the Company amended and restated the agreement for the $750 million senior unsecured revolving credit facility (the “Credit Facility”) entered into in September 2011. The amended and restated Credit Facility matures in April 2019. Under the Credit Facility, the Company can issue letters of credit totaling $150 million, which reduce the available borrowing capacity. At December 31, 2014, letters of credit totaling less than $1 million were issued under the Credit Facility. Interest on the Credit Facility is based on certain published rates plus an applicable margin that will vary over a range from 75 basis points to 163 basis points based on changes in the Company's public debt ratings. At the option of the Company, it may elect to lock into LIBOR-based interest rates for periods up to six months. Interest on any outstanding amounts not covered under LIBOR-based interest rate contracts is based on an alternate base rate, which is calculated by reference to the prime rate, the federal funds rate or an adjusted LIBOR rate. At both December 31, 2014 and 2013, the Company's borrowing rate for LIBOR-based loans under the Credit Facility was LIBOR plus 1.125%. The Credit Facility contains various covenants, including the maintenance of certain financial ratios, which could impact the Company's ability to, among other things, incur additional indebtedness. At both December 31, 2014 and 2013, there were no outstanding borrowings under the Credit Facility. | ||||||||
Senior Notes | ||||||||
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. 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. | ||||||||
All of the 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. | ||||||||
Maturities of Long-Term Debt | ||||||||
As of December 31, 2014, long-term debt maturing in each of the years subsequent to December 31, 2015 was as follows: | ||||||||
Year Ending December 31, | ||||||||
2016 | $ | 309 | ||||||
2017 | 381 | |||||||
2018 | 4 | |||||||
2019 | 301 | |||||||
2020 | 500 | |||||||
Thereafter | 1,726 | |||||||
Total maturities of long-term debt | 3,221 | |||||||
Unamortized discount | (20 | ) | ||||||
Fair value basis adjustments attributable to hedged debt | 43 | |||||||
Total long-term debt, net of current portion | $ | 3,244 | ||||||
FINANCIAL_INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS | |||||||||||
Interest Rate Derivatives – Cash Flow Hedges | ||||||||||||
From time to 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. A summary of the outstanding notional amounts of interest rate derivatives – cash flow hedges as of December 31, 2014 and 2013 is as follows: | ||||||||||||
Notional Amount | ||||||||||||
2014 | 2013 | |||||||||||
Forward Starting Interest Rate Swaps | $ | 150 | $ | 100 | ||||||||
The forward starting interest rate swaps outstanding as of December 31, 2014 and 2013 are 21 to 24 month forward agreements that cover 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. The forward starting interest rate swaps have fixed interest rates ranging from 3.57% to 3.79%. | ||||||||||||
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 2014. In connection with the Company's senior notes offering in March 2014 (see Note 13), the Company settled the Treasury Lock Agreements, which were accounted for as cash flow hedges. The loss on settlement of the Treasury Lock Agreements was not material. | ||||||||||||
The total net loss, net of taxes, recognized in accumulated other comprehensive loss, related to the Company's cash flow hedges as of December 31, 2014 and 2013 was $15 million and $5 million, respectively. The loss recognized on the Company's cash flow hedges for the years ended December 31, 2014, 2013 and 2012, as a result of ineffectiveness, was not material. The net amount of deferred losses on cash flow hedges that is expected to be reclassified from accumulated other comprehensive loss 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. A summary of the notional amounts of interest rate derivatives – fair value hedges as of December 31, 2014 and 2013 is as follows: | ||||||||||||
Floating Rate | Notional Amount | |||||||||||
Debt Instrument | Paid by the Company | 2014 | 2013 | |||||||||
3.20% Senior Notes due April 2016 | Six-month LIBOR plus a 2.3% spread | $ | 200 | $ | 200 | |||||||
4.75% Senior Notes due January 2020 | One-month LIBOR plus a 3.6% spread | 350 | 350 | |||||||||
4.70% Senior Notes due April 2021 | One-month LIBOR plus a 2.45% to 3.39% spread | 400 | 400 | |||||||||
4.25% Senior Notes due April 2024 | One-month LIBOR plus a 1.54% to 1.59% spread | 250 | — | |||||||||
$ | 1,200 | $ | 950 | |||||||||
In prior years, the Company entered into various fixed-to-variable interest rate swap agreements that were accounted for as fair value hedges of a portion of the Senior Notes due 2016 and a portion of the Senior Notes due 2020. In July 2012, the Company monetized the value of these interest rate swap assets by terminating the hedging instruments. The asset value, including accrued interest through the date of termination, was $72 million and the amount to be amortized as a reduction of interest expense over the remaining terms of the hedged debt instruments was $65 million. | ||||||||||||
Since inception, the fair value hedges have been effective or highly effective; therefore, there is no impact on earnings for the years ended December 31, 2014, 2013 and 2012 as a result of hedge ineffectiveness. | ||||||||||||
A summary of the fair values of derivative instruments in the consolidated balance sheets is stated in the table below: | ||||||||||||
December 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 | $ | 17 | $ | — | |||||||
Forward starting interest rate swaps | — | Other assets | 2 | |||||||||
Total Asset Derivatives | 17 | 2 | ||||||||||
Liability Derivatives: | ||||||||||||
Interest rate swaps | Other liabilities | 13 | Other liabilities | 34 | ||||||||
Forward starting interest rate swaps | Other liabilities | 15 | — | |||||||||
Total Liability Derivatives | 28 | 34 | ||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Put option | Prepaid expenses and other current assets | 1 | Other assets | 4 | ||||||||
Liability Derivatives: | ||||||||||||
Call option | Accounts payable and accrued expenses | 5 | Other liabilities | 8 | ||||||||
Total Net Derivatives Liabilities | $ | (15 | ) | $ | (36 | ) |
PREFERRED_STOCK_AND_COMMON_STO
PREFERRED STOCK AND COMMON STOCKHOLDERS' EQUITY | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||
PREFERRED STOCK AND COMMON STOCKHOLDERS' EQUITY | PREFERRED STOCK AND COMMON STOCKHOLDERS’ EQUITY | |||||||||||||||||||
Series Preferred Stock | ||||||||||||||||||||
Quest Diagnostics is authorized to issue up to 10 million shares of Series Preferred Stock, par value $1.00 per share. The Company's Board of Directors has the authority to issue such shares without stockholder approval and to determine the designations, preferences, rights and restrictions of such shares. No shares are currently outstanding. | ||||||||||||||||||||
Common Stock | ||||||||||||||||||||
On May 4, 2006, the Company's Restated Certificate of Incorporation was amended to increase the number of authorized shares of common stock, par value $0.01 per share, from 300 million shares to 600 million shares. | ||||||||||||||||||||
Changes in Accumulated Other Comprehensive Loss by Component | ||||||||||||||||||||
The market value adjustments represent unrealized holding gains (losses) on available-for-sale securities, net of taxes. The net deferred loss on cash flow hedges represents deferred losses on the Company’s interest rate related derivative financial instruments designated as cash flow hedges, net of amounts reclassified to interest expense (see Note 14). For the years ended December 31, 2014, 2013 and 2012, the tax effects related to the market valuation adjustments, deferred losses and other were not material. Foreign currency translation adjustments are not adjusted for income taxes since they relate to indefinite investments in non-U.S. subsidiaries. | ||||||||||||||||||||
The changes in accumulated other comprehensive loss by component for 2014, 2013 and 2012 were as follows: | ||||||||||||||||||||
Foreign | Market Value | Net Deferred Loss on Cash Flow Hedges | Other | Accumulated Other Comprehensive (Loss) Income | ||||||||||||||||
Currency | Adjustment | |||||||||||||||||||
Translation | ||||||||||||||||||||
Adjustment | ||||||||||||||||||||
Balance, December 31, 2011 | $ | 1 | $ | 1 | $ | (8 | ) | $ | (2 | ) | $ | (8 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 24 | — | — | (3 | ) | 21 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | — | 1 | — | 1 | |||||||||||||||
Net current period other comprehensive income (loss) | 24 | — | 1 | (3 | ) | 22 | ||||||||||||||
Balance, December 31, 2012 | 25 | 1 | (7 | ) | (5 | ) | 14 | |||||||||||||
Other comprehensive income (loss) before reclassifications | 2 | (1 | ) | 1 | 1 | 3 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (29 | ) | — | 1 | 3 | (25 | ) | |||||||||||||
Net current period other comprehensive (loss) income | (27 | ) | (1 | ) | 2 | 4 | (22 | ) | ||||||||||||
Balance, December 31, 2013 | (2 | ) | — | (5 | ) | (1 | ) | (8 | ) | |||||||||||
Other comprehensive loss before reclassifications | (7 | ) | (1 | ) | (11 | ) | (1 | ) | (20 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | — | 1 | — | 1 | |||||||||||||||
Net current period other comprehensive loss | (7 | ) | (1 | ) | (10 | ) | (1 | ) | (19 | ) | ||||||||||
Balance, December 31, 2014 | $ | (9 | ) | $ | (1 | ) | $ | (15 | ) | $ | (2 | ) | $ | (27 | ) | |||||
For the year ended December 31, 2013, principally all of the gross foreign currency adjustment was reclassified from accumulated other comprehensive income (loss) to income (loss) from discontinued operations, net of taxes due to the completed sale of HemoCue. | ||||||||||||||||||||
Dividends | ||||||||||||||||||||
During each of the quarters 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. During each of the first three quarters in 2012, the Company's Board of Directors declared a quarterly cash dividend of $0.17 per common share, and in November 2012, declared an increase in the quarterly cash dividend from $0.17 per common share to $0.30 per common share. | ||||||||||||||||||||
On January 29, 2015, the Company's Board of Directors authorized an increase in its quarterly dividend from $0.33 per share to $0.38 per share, commencing with the dividend payable in April 2015. | ||||||||||||||||||||
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. At December 31, 2014, $696 million remained available under the Company’s share repurchase authorization. | ||||||||||||||||||||
In January 2012, 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 $1.1 billion. | ||||||||||||||||||||
Share Repurchases | ||||||||||||||||||||
For the year ended December 31, 2014, the Company repurchased 2.2 million shares of its common stock at an average price of $59.49 per share for a total of $132 million. | ||||||||||||||||||||
On April 19, 2013 and September 4, 2013, the Company entered in accelerated share repurchase agreements ("ASR") with financial institutions to repurchase $450 million and $350 million, respectively, of the Company’s common stock as part of the Company’s Common Stock repurchase program. Each ASR was structured as a combination of two transactions: (1) a treasury stock repurchase and (2) a forward contract which permitted the Company to purchase shares immediately with the final purchase price of those shares determined by the volume weighted average price of the Company's common stock during the purchase period, less a fixed discount. Pursuant to these ASRs, the Company received 7.6 million shares of common stock at a final price of $59.46 per share and 5.8 million shares of common stock at a final price of $60.73 per share, respectively. | ||||||||||||||||||||
In addition to the ASRs previously discussed, the Company repurchased shares of its common stock on the open market in 2013. For the year ended December 31, 2013, the Company repurchased 4.1 million shares of its common stock at an average price of $57.63 per share for a total of $237 million on the open market. | ||||||||||||||||||||
For the year ended December 31, 2012, the Company repurchased 3.4 million shares of its common stock at an average price of $58.31 per share for $200 million. | ||||||||||||||||||||
For the years ended December 31, 2014, 2013 and 2012 the Company reissued 2 million shares, 3 million shares and 4 million shares, respectively, for employee benefit plans. |
STOCK_OWNERSHIP_AND_COMPENSATI
STOCK OWNERSHIP AND COMPENSATION PLANS | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
STOCK OWNERSHIP AND COMPENSATION PLANS | STOCK OWNERSHIP AND COMPENSATION PLANS | ||||||||||||||||||||
Employee and Non-employee Directors Stock Ownership Programs | |||||||||||||||||||||
In 2005, the Company established the ELTIP to replace a prior plan. At the Company's annual shareholders' meeting in May 2012, the shareholders approved certain amendments to the ELTIP including: (i) increasing the number of shares available for award under the ELTIP by approximately 7 million shares; (ii) limiting the number of shares subject to stock options or SARs that may be awarded to an individual during any fiscal year to 2 million; (iii) limiting the number of shares subject to stock awards that may be awarded to an individual during any fiscal year to 1 million; (iv) prohibiting the exchange of stock options or SARs for cash; and (v) extending the term of the ELTIP until the date of the 2022 annual shareholders' meeting. | |||||||||||||||||||||
The ELTIP provides for three types of awards: (a) stock options, (b) stock appreciation rights and (c) stock awards. The ELTIP provides for the grant to eligible employees of either non-qualified or incentive stock options, or both, to purchase shares of Company common stock at an exercise price no less than the fair market value of the Company's common stock on the date of grant. The stock options are subject to forfeiture if employment terminates prior to the end of the vesting period prescribed by the Board of Directors. Grants of stock appreciation rights allow eligible employees to receive a payment based on the appreciation of Company common stock in cash, shares of Company common stock or a combination thereof. The stock appreciation rights are granted at an exercise price no less than the fair market value of the Company's common stock on the date of grant. Stock options and stock appreciation rights granted under the ELTIP expire on the date designated by the Board of Directors but in no event more than ten years from date of grant. No stock appreciation rights have been granted under the ELTIP. The ELTIP allows eligible employees to receive awards of shares, or the right to receive shares, of Company common stock, the equivalent value in cash or a combination thereof. These shares are subject to forfeiture if employment terminates prior to the end of the vesting period prescribed by the Board of Directors. For performance share unit awards, the actual amount of performance share awards earned is based on the achievement of the performance goals specified in the awards. For all award types, the vesting period is generally over three years from the date of grant. Key executive, managerial and technical employees are eligible to participate in the ELTIP. | |||||||||||||||||||||
The maximum number of shares of Company common stock that may be optioned or granted under the ELTIP is approximately 60 million shares. | |||||||||||||||||||||
In 2005, the Company established the DLTIP, to replace the Company's prior plan. At the Company's annual shareholders' meeting in May 2009, the shareholders approved certain amendments to the DLTIP including: (i) increasing the maximum term that the Board of Directors may establish for awards of stock options from seven to ten years, beginning with awards in 2009; and (ii) extending the term of the DLTIP until the date of the 2019 annual shareholders' meeting. | |||||||||||||||||||||
The DLTIP provides for the grant to non-employee directors of non-qualified stock options to purchase shares of Company common stock at an exercise price no less than the fair market value of the Company's common stock on the date of grant. The DLTIP also permits awards of restricted stock and restricted stock units to non-employee directors. Stock options granted under the DLTIP expire on the date designated by the Board of Directors but in no event more than ten years from date of grant, and generally become exercisable in three equal annual installments beginning on the first anniversary date of the grant of the option regardless of whether the optionee remains a director of the Company. The maximum number of shares that may be issued under the DLTIP is 2.4 million shares. For the years ended December 31, 2014, 2013 and 2012, grants under the DLTIP totaled 32 thousand shares, 75 thousand shares and 72 thousand shares, respectively. | |||||||||||||||||||||
The Company's practice has been to issue shares related to its stock-based compensation program from shares of its common stock held in treasury or by issuing new shares of its common stock. See Note 15 for further information regarding the Company's share repurchase program. | |||||||||||||||||||||
The fair value of each stock option award granted was estimated on the date of grant using a lattice-based option-valuation model. The expected volatility under the lattice-based option-valuation model was based on the current and the historical implied volatilities from traded options of the Company's common stock. The dividend yield was based on the approved annual dividend rate in effect and current market price of the underlying common stock at the time of grant. The risk-free interest rate of each stock option granted was based on the U.S. Treasury yield curve in effect at the time of grant for bonds with maturities ranging from 1 month to 10 years. The expected holding period of the options granted was estimated using the historical exercise behavior of employees. The weighted average assumptions used in valuing options granted in the periods presented are: | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Weighted average fair value of options at grant date | $10.99 | $12.64 | $15.87 | ||||||||||||||||||
Expected volatility | 25.10% | 25.80% | 27% | ||||||||||||||||||
Dividend yield | 2.10% | 1.40% | 0.90% | ||||||||||||||||||
Risk-free interest rate | 1.6% - 2.0% | 1.1% - 1.3% | 1.3% - 1.5% | ||||||||||||||||||
Expected holding period, in years | 5.5 - 6.6 | 5.5 - 6.7 | 6.7 - 7.5 | ||||||||||||||||||
The fair value of restricted stock awards, restricted stock units and performance share units is the average market price of the Company's common stock at the date of grant. | |||||||||||||||||||||
Transactions under the stock option plans for 2014 were as follows: | |||||||||||||||||||||
Shares | Weighted | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||
(in millions) | Average Exercise Price | (in years) | |||||||||||||||||||
Options outstanding, beginning of year | 6.3 | $ | 54.2 | ||||||||||||||||||
Options granted | 2.5 | 52.39 | |||||||||||||||||||
Options exercised | (1.5 | ) | 51.65 | ||||||||||||||||||
Options forfeited and canceled | (0.7 | ) | 50.47 | ||||||||||||||||||
Options outstanding, end of year | 6.6 | $ | 54.46 | 7.3 | $ | 83 | |||||||||||||||
Exercisable, end of year | 3.1 | $ | 55 | 5.6 | $ | 37 | |||||||||||||||
Vested and expected to vest, end of year | 6.4 | $ | 54.5 | 7.2 | $ | 81 | |||||||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between the Company's closing common stock price on the last trading day of 2014 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on December 31, 2014. This amount changes based on the fair market value of the Company's common stock. Total intrinsic value of options exercised in 2014, 2013 and 2012 was $13 million, $32 million and $45 million, respectively. | |||||||||||||||||||||
As of December 31, 2014, there was $14 million of unrecognized stock-based compensation cost related to stock options which is expected to be recognized over a weighted average period of 1.4 years. | |||||||||||||||||||||
The following summarizes the activity relative to stock awards, including restricted stock awards, restricted stock units and performance share units, for 2014, 2013 and 2012: | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | ||||||||||||||||
(in millions) | Average | (in millions) | Average | (in millions) | Average | ||||||||||||||||
Grant Date | Grant Date | Grant Date | |||||||||||||||||||
Fair Value | Fair Value | Fair Value | |||||||||||||||||||
Shares outstanding, beginning of year | 0.7 | $ | 57.2 | 1.2 | $ | 56.84 | 2 | $ | 54.61 | ||||||||||||
Shares granted | 0.7 | 52.72 | 0.8 | 56.79 | 0.8 | 57.78 | |||||||||||||||
Shares vested | (0.3 | ) | 57.14 | (0.5 | ) | 56.25 | (0.9 | ) | 52.62 | ||||||||||||
Shares forfeited and canceled | — | — | (0.1 | ) | 56.92 | (0.1 | ) | 57.09 | |||||||||||||
Adjustment to estimate of performance share units to be earned | 0.1 | 56.1 | (0.7 | ) | 56.84 | (0.6 | ) | 57.06 | |||||||||||||
Shares outstanding, end of year | 1.2 | $ | 54.37 | 0.7 | $ | 57.2 | 1.2 | $ | 56.84 | ||||||||||||
As of December 31, 2014, there was $27 million of unrecognized stock-based compensation cost related to nonvested stock awards, which is expected to be recognized over a weighted average period of 1.7 years. Total fair value of shares vested was $17 million, $28 million and $53 million for the years ended December 31, 2014, 2013 and 2012, respectively. The amount of unrecognized stock-based compensation cost is subject to change based on changes, if any, to management's best estimates of the achievement of the performance goals specified in such awards and the resulting number of shares that will be earned at the end of the performance periods. | |||||||||||||||||||||
For the years ended December 31, 2014, 2013 and 2012, stock-based compensation expense totaled $51 million, $28 million and $50 million, respectively. Income tax benefits related to stock-based compensation expense totaled $20 million, $11 million and $19 million for the years ended December 31, 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||||||
Under the Company's Employee Stock Purchase Plan (“ESPP”), substantially all employees can elect to have up to 10% of their annual wages withheld to purchase Quest Diagnostics common stock. The purchase price of the stock is 85% of the market price of the Company's common stock on the last business day of each calendar month. Under the ESPP, the maximum number of shares of Quest Diagnostics common stock which may be purchased by eligible employees is 5 million. Approximately 392, 404 and 406 thousand shares of common stock were purchased by eligible employees in 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Defined Contribution Plans | |||||||||||||||||||||
The Company maintains qualified defined contribution plans covering substantially all of its employees. The maximum Company matching contribution is 5% of eligible employee compensation. The Company's expense for contributions to its defined contribution plans aggregated $73 million, $71 million and $73 million for 2014, 2013 and 2012, respectively. | |||||||||||||||||||||
Supplemental Deferred Compensation Plans | |||||||||||||||||||||
The Company has a supplemental deferred compensation plan that is an unfunded, non-qualified plan that provides for certain management and highly compensated employees to defer up to 50% of their salary in excess of their defined contribution plan limits and for certain eligible employees, up to 95% of their variable incentive compensation. The maximum Company matching contribution is 5% of eligible employee compensation. The compensation deferred under this plan, together with Company matching amounts, are credited with earnings or losses measured by the mirrored rate of return on investments elected by plan participants. Each plan participant is fully vested in all deferred compensation, Company match and earnings credited to their account. The amounts accrued under the Company's deferred compensation plans were $49 million and $50 million at December 31, 2014 and 2013, respectively. Although the Company is currently contributing all participant deferrals and matching amounts to trusts, the funds in these trusts, totaling $49 million and $50 million at December 31, 2014 and 2013, respectively, are general assets of the Company and are subject to any claims of the Company's creditors. | |||||||||||||||||||||
The Company also offers certain employees the opportunity to participate in a non-qualified deferred compensation program. Eligible participants are allowed to defer up to $20 thousand of eligible compensation per year. The Company matches employee contributions equal to 25%, up to a maximum of $5 thousand per plan year. A participant's deferrals, together with Company matching credits, are “invested” at the direction of the employee in a hypothetical portfolio of investments which are tracked by an administrator. Each participant is fully vested in their deferred compensation and vests in Company matching contributions over a four-year period at 25% per year. The amounts accrued under this plan were $36 million and $34 million at December 31, 2014 and 2013, respectively. The Company purchases life insurance policies, with the Company named as beneficiary of the policies, for the purpose of funding the program's liability. The cash surrender value of such life insurance policies was $30 million and $29 million at December 31, 2014 and 2013, respectively. | |||||||||||||||||||||
For the years ended December 31, 2014, 2013 and 2012, the Company's expense for matching contributions to these plans were not material. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES | |||
Letter of Credit Lines and Contractual Obligations | ||||
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 17, 2015. The Company can also issue letters of credit under its senior unsecured revolving credit facility. For further details regarding the senior unsecured revolving credit facility, see Note 13. | ||||
In support of its risk management program, to ensure the Company’s performance or payment to third parties, $69 million in letters of credit were outstanding at December 31, 2014. The letters of credit primarily represent collateral for current and future automobile liability and workers’ compensation loss payments. | ||||
Minimum rental commitments under noncancelable operating leases, primarily real estate, in effect at December 31, 2014 are as follows: | ||||
Year Ending December 31, | ||||
2015 | $ | 193 | ||
2016 | 148 | |||
2017 | 104 | |||
2018 | 66 | |||
2019 | 47 | |||
2020 and thereafter | 163 | |||
Minimum lease payments | 721 | |||
Noncancelable sub-lease income | — | |||
Net minimum lease payments | $ | 721 | ||
Operating lease rental expense for 2014, 2013 and 2012 totaled $242 million, $223 million and $211 million, respectively. Rent expense associated with operating leases that include scheduled rent increases and tenant incentives, such as rent holidays and improvement allowances, is recorded on a straight-line basis over the term of the lease. | ||||
The Company has certain noncancelable commitments to purchase products or services from various suppliers, mainly for consulting and other service agreements, and standing orders to purchase reagents and other laboratory supplies. At December 31, 2014, the approximate total future purchase commitments are $235 million, of which $80 million are expected to be incurred in 2015, $111 million are expected to be incurred in 2016 through 2017 and the balance thereafter. | ||||
Contingent Lease Obligations | ||||
The Company remains 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. While over the course of many years, the title to the properties and interest in the subject leases have been transferred to third parties and the subject leases have been amended several times by such third parties, the lessors have not formally released the subsidiary predecessor companies from their original obligations under the leases and therefore remain contingently liable in the event of default. The remaining terms of the lease obligations and the Company's corresponding indemnifications range from 9 to 33 years. The lease payments under certain leases are subject to market value adjustments and contingent rental payments and therefore, the total contingent obligations under the leases cannot be precisely determined but are likely to total several hundred million dollars. A claim against the Company would be made only upon the current lessee's default and after a series of claims and corresponding defaults by third parties that precede the Company in the order of liability. The Company also has certain indemnification rights from other parties to recover losses in the event of default on the lease obligations. The Company believes that the likelihood of its performance under these contingent obligations is remote and no liability has been recorded for any potential payments under the contingent lease obligations. | ||||
Settlements | ||||
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. Celera and the director and officer defendants have reached an agreement to settle this action, which is subject to court approval. The settlement is expected to be fully covered by insurance. | ||||
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 for summary judgment was granted and the case was dismissed. Plaintiffs filed an appeal. The parties have settled this matter. | ||||
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. The parties have settled this matter. | ||||
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. The parties have settled these matters. | ||||
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 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 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. The Company has filed a motion to dismiss the state's amended complaint in intervention. | ||||
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 lawsuits, and from time to time has received subpoenas, related to billing practices based on the qui tam provisions of the Civil False Claims Act 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 December 31, 2014, the Company does not believe that any losses related to the legal matters described above are probable. 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, totaled $11 million and less than $5 million at December 31, 2014 and 2013, respectively. | ||||
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 $113 million and $121 million as of December 31, 2014 and 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 | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS | |||||||||||
During the fourth quarter of 2012, the Company committed to a plan to sell HemoCue. In February 2013, the Company entered into an agreement to sell HemoCue for approximately $300 million plus estimated cash on hand at closing and other customary working capital adjustments. The Company completed the sale of HemoCue in April 2013. The Company completed the sale of OralDNA in December 2012. As a result, the Company's 2012 results include charges in discontinued operations for the asset impairment associated with HemoCue and the loss on sale associated with OralDNA totaling $86 million. Discontinued operations also includes a $8 million income tax expense related to the re-valuation of deferred tax assets associated with HemoCue and a $4 million income tax benefit related to the remeasurement of deferred taxes associated with HemoCue as a result of an enacted income tax rate change in Sweden. | ||||||||||||
Income (loss) from discontinued operations, net of taxes for the year ended December 31, 2013 includes a gain of $14 million (including foreign currency translation adjustments, partially offset by income tax expense and transaction costs) associated with the sale of HemoCue. In addition, income (loss) from discontinued operations, net of taxes for the year ended December 31, 2013, includes discrete tax benefits of $20 million associated with favorable resolution of certain tax contingencies related to our NID business. | ||||||||||||
Results of operations for HemoCue and OralDNA have been reported as discontinued operations in the accompanying consolidated financial statements and related notes to consolidated financial statements for all periods presented. | ||||||||||||
Results of operations for NID, a test kit manufacturing subsidiary which was wound down in 2006, have been reported as discontinued operations in the accompanying consolidated statements of operations and related disclosures for all periods presented. The Company began reporting NID as a discontinued operation in 2006 and will continue to report NID as a discontinued operation until uncertain tax benefits associated with NID are resolved. | ||||||||||||
Summarized financial information for the discontinued operations is set forth below: | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Net revenues | $ | — | $ | 28 | $ | 117 | ||||||
Income (loss) from discontinued operations before taxes | 1 | 25 | (74 | ) | ||||||||
Income tax expense benefit | (4 | ) | (10 | ) | — | |||||||
Income (loss) from discontinued operations, net of taxes | $ | 5 | $ | 35 | $ | (74 | ) | |||||
Continuing cash flows from discontinued operations were not material. | ||||||||||||
The remaining balance sheet information related to NID, OralDNA and HemoCue was not material at December 31, 2014 and 2013. |
BUSINESS_SEGMENT_INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended | |||||||||||
Dec. 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 information and insights based on clinical testing, including routine, esoteric, gene-based and anatomic pathology testing, and related services. Customers of the DIS business include patients, physicians, hospitals, ACOs, IDNs, employers, governmental institutions and other commercial clinical laboratories. The DIS business accounted for greater than 90% of net revenues from continuing operations in 2014, 2013 and 2012. | ||||||||||||
All other operating segments are included in the Company's DS business and consist of its risk assessment services, clinical trials testing, 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, testing for clinical trials, robust information technology solutions and diagnostic products. | ||||||||||||
During 2014, the Company acquired Solstas, Summit Health and Steward which are included in the Company's DIS business. See Note 5 for further details regarding business acquisitions. | ||||||||||||
During 2013, the Company acquired certain operations of UMass, ATN, Dignity and ConVerge which are included in the Company's DIS business. In addition, the Company completed the sale of Enterix in the third quarter of 2013, which is included in all other operating segments. | ||||||||||||
During 2012, the Company acquired the operations of S.E.D., which is included in the Company's DIS business. | ||||||||||||
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 18 for further details regarding discontinued operations. | ||||||||||||
At December 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 years ended December 31, 2014, 2013 and 2012. Segment asset information is not presented since it is not used by the chief operating decision maker at the operating segment level. Operating earnings (loss) of each segment represents net revenues less directly identifiable expenses to arrive at operating income for the segment. General corporate activities included in the table below are comprised of general management and administrative corporate expenses, amortization of intangibles assets, other miscellaneous operating income and expenses, net of certain general corporate activity costs that are allocated to the DIS and DS businesses, and the third quarter of 2013 pre-tax gain on the sale of the ibrutinib royalty rights and the pre-tax loss on the sale of Enterix (see Note 6). The accounting policies of the segments are the same as those of the Company as set forth in Note 2. | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Net revenues: | ||||||||||||
DIS business | $ | 6,873 | $ | 6,587 | $ | 6,820 | ||||||
All other operating segments | 562 | 559 | 563 | |||||||||
Total net revenues | $ | 7,435 | $ | 7,146 | $ | 7,383 | ||||||
Operating earnings (loss): | ||||||||||||
DIS business | $ | 1,068 | $ | 1,201 | $ | 1,370 | ||||||
All other operating segments | 94 | 76 | 67 | |||||||||
General corporate activities | (179 | ) | 198 | (236 | ) | |||||||
Total operating income | 983 | 1,475 | 1,201 | |||||||||
Non-operating expenses, net | (134 | ) | (127 | ) | (133 | ) | ||||||
Income from continuing operations before taxes | 849 | 1,348 | 1,068 | |||||||||
Income tax expense | 262 | 500 | 402 | |||||||||
Income from continuing operations | 587 | 848 | 666 | |||||||||
Income (loss) from discontinued operations, net of taxes | 5 | 35 | (74 | ) | ||||||||
Net income | 592 | 883 | 592 | |||||||||
Less: Net income attributable to noncontrolling interests | 36 | 34 | 36 | |||||||||
Net income attributable to Quest Diagnostics | $ | 556 | $ | 849 | $ | 556 | ||||||
2014 | 2013 | 2012 | ||||||||||
Depreciation and amortization: | ||||||||||||
DIS business | $ | 206 | $ | 189 | $ | 188 | ||||||
All other operating segments | 13 | 12 | 13 | |||||||||
General corporate | 95 | 82 | 77 | |||||||||
314 | 283 | 278 | ||||||||||
Adjustments: Discontinued operations | — | — | 9 | |||||||||
Total depreciation and amortization | $ | 314 | $ | 283 | $ | 287 | ||||||
Capital expenditures: | ||||||||||||
DIS business | $ | 283 | $ | 196 | $ | 145 | ||||||
All other operating segments | 17 | 26 | 24 | |||||||||
General corporate | 8 | 9 | 11 | |||||||||
308 | 231 | 180 | ||||||||||
Adjustments: Discontinued operations | — | — | 2 | |||||||||
Total capital expenditures | $ | 308 | $ | 231 | $ | 182 | ||||||
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS |
During January 2015, the Company adopted a course of action related to its multi-year Invigorate program to further reduce its cost structure through 2017. This multi-year commitment will focus on standardizing processes, information technology systems, equipment and data; enhancing electronic enabling services; and enhancing reimbursement for work performed. | |
On January 29, 2015, the Company's Board of Directors authorized an increase in its quarterly dividend from $0.33 per share to $0.38 per share, commencing with the dividend payable in April 2015. |
Quarterly_Operating_Results_un
Quarterly Operating Results (unaudited) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Quarterly Financial Data [Abstract] | ||||||||||||||||||||
Quarterly Operating Results (unaudited) | ||||||||||||||||||||
2014 (a) | First | Second | Third | Fourth | Total | |||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||
(b) | (c) | (d) | (e) | |||||||||||||||||
Net revenues | $ | 1,746 | $ | 1,902 | $ | 1,904 | $ | 1,883 | $ | 7,435 | ||||||||||
Gross profit | 645 | 728 | 726 | 699 | 2,798 | |||||||||||||||
Income from continuing operations | 111 | 142 | 139 | 195 | 587 | |||||||||||||||
Income from discontinued operations, net of taxes | — | — | — | 5 | 5 | |||||||||||||||
Net income | 111 | 142 | 139 | 200 | 592 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | 7 | 9 | 10 | 10 | 36 | |||||||||||||||
Net income attributable to Quest Diagnostics | $ | 104 | $ | 133 | $ | 129 | $ | 190 | $ | 556 | ||||||||||
Amounts attributable to Quest Diagnostics' stockholders: | ||||||||||||||||||||
Income from continuing operations | $ | 104 | $ | 133 | $ | 129 | $ | 185 | $ | 551 | ||||||||||
Income from discontinued operations, net of taxes | — | — | — | 5 | 5 | |||||||||||||||
Net income | $ | 104 | $ | 133 | $ | 129 | $ | 190 | $ | 556 | ||||||||||
Earnings per share attributable to Quest Diagnostics' stockholders - basic: | ||||||||||||||||||||
Income from continuing operations | $ | 0.72 | $ | 0.92 | $ | 0.89 | $ | 1.27 | $ | 3.8 | ||||||||||
Income from discontinued operations | — | — | — | 0.03 | 0.03 | |||||||||||||||
Net income | $ | 0.72 | $ | 0.92 | $ | 0.89 | $ | 1.3 | $ | 3.83 | ||||||||||
Earnings per share attributable to Quest Diagnostics' stockholders - diluted: | ||||||||||||||||||||
Income from continuing operations | $ | 0.71 | $ | 0.92 | $ | 0.88 | $ | 1.26 | $ | 3.78 | ||||||||||
Income from discontinued operations | — | — | — | 0.03 | 0.03 | |||||||||||||||
Net income | $ | 0.71 | $ | 0.92 | $ | 0.88 | $ | 1.29 | $ | 3.81 | ||||||||||
2013 (a) | First | Second | Third | Fourth | Total | |||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||
(f) | (g) | (h) | (i) | |||||||||||||||||
Net revenues | $ | 1,787 | $ | 1,815 | $ | 1,788 | $ | 1,756 | $ | 7,146 | ||||||||||
Gross profit | 695 | 721 | 699 | 705 | 2,820 | |||||||||||||||
Income from continuing operations | 124 | 161 | 412 | 151 | 848 | |||||||||||||||
Income from discontinued operations, net of taxes | 20 | 13 | 2 | — | 35 | |||||||||||||||
Net income | 144 | 174 | 414 | 151 | 883 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | 8 | 9 | 9 | 8 | 34 | |||||||||||||||
Net income attributable to Quest Diagnostics | $ | 136 | $ | 165 | $ | 405 | $ | 143 | $ | 849 | ||||||||||
Amounts attributable to Quest Diagnostics' stockholders: | ||||||||||||||||||||
Income from continuing operations | $ | 116 | $ | 152 | $ | 403 | $ | 143 | $ | 814 | ||||||||||
Income from discontinued operations, net of taxes | 20 | 13 | 2 | — | 35 | |||||||||||||||
Net income | $ | 136 | $ | 165 | $ | 405 | $ | 143 | $ | 849 | ||||||||||
Earnings per share attributable to Quest Diagnostics' stockholders - basic: | ||||||||||||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.99 | $ | 2.68 | $ | 0.98 | $ | 5.35 | ||||||||||
Income (loss) from discontinued operations | 0.13 | 0.08 | 0.02 | (0.01 | ) | 0.23 | ||||||||||||||
Net income | $ | 0.86 | $ | 1.07 | $ | 2.7 | $ | 0.97 | $ | 5.58 | ||||||||||
Earnings per share attributable to Quest Diagnostics' stockholders - diluted: | ||||||||||||||||||||
Income from continuing operations | $ | 0.72 | $ | 0.99 | $ | 2.66 | $ | 0.97 | $ | 5.31 | ||||||||||
Income from discontinued operations | 0.13 | 0.08 | 0.02 | — | 0.23 | |||||||||||||||
Net income | $ | 0.85 | $ | 1.07 | $ | 2.68 | $ | 0.97 | $ | 5.54 | ||||||||||
(a) | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). | |||||||||||||||||||
(b) | Includes pre-tax charges of $24 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $12 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $4 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||
(c) | Includes pre-tax charges of $27 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $16 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $7 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||
(d) | Includes pre-tax charges of $40 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $14 million, $25 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $8 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||
(e) | Includes pre-tax charges of $30 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $13 million, $16 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $5 million, principally representing costs incurred related to legal matters, and a pre-tax gain included in other operating (income) expense, net of $9 million associated with a decrease in the fair value of the contingent consideration accrual associated with the Summit Health acquisition. Income from continuing operations includes a discrete benefit of $44 million associated with the favorable resolution of certain tax contingencies. | |||||||||||||||||||
(f) | Includes pre-tax charges of $45 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $18 million and $27 million were included in cost of services and selling, general and administrative expenses, respectively. | |||||||||||||||||||
(g) | Includes pre-tax charges of $19 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Income from discontinued operations, net of taxes includes a gain on the sale of HemoCue of $14 million (see Note 18). | |||||||||||||||||||
(h) | Includes pre-tax charges of $39 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $28 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax gain on sale of royalty rights of $474 million and the pre-tax loss of $40 million associated with the sale of the Enterix (see Note 6). | |||||||||||||||||||
(i) | Includes pre-tax charges of $12 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $5 million were included in cost of services and selling, general and administrative expenses, respectively. |
Schedule_II_Valuation_Accounts
Schedule II - Valuation Accounts and Reserves | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||
SCHEDULE II - VALUATION ACCOUNTS AND RESERVES | QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES | |||||||||||||||
SCHEDULE II - VALUATION ACCOUNTS AND RESERVES | ||||||||||||||||
(in millions) | ||||||||||||||||
Balance at | Provision for Doubtful Accounts | Net Deductions | Balance at | |||||||||||||
1/1/14 | and Other | 12/31/14 | ||||||||||||||
Year Ended December 31, 2014 | ||||||||||||||||
Doubtful accounts and allowances | $ | 236 | $ | 296 | $ | 282 | (a) | $ | 250 | |||||||
Balance at | Provision for Doubtful Accounts | Net Deductions | Balance at | |||||||||||||
1/1/13 | and Other | 12/31/13 | ||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||
Doubtful accounts and allowances | $ | 236 | $ | 270 | $ | 270 | (a) | $ | 236 | |||||||
Balance at | Provision for Doubtful Accounts | Net Deductions | Balance at | |||||||||||||
1/1/12 | and Other | 12/31/12 | ||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||
Doubtful accounts and allowances | $ | 237 | $ | 269 | $ | 270 | (a) | $ | 236 | |||||||
(a) | Primarily represents the write-off of accounts receivable, net of recoveries. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ||||||||
Principles of Consolidation | The consolidated financial statements include the accounts of all entities controlled by the Company through its direct or indirect ownership of a majority voting interest and the accounts of any variable interest entities ("VIEs") where the Company is subject to a majority of the risk of loss from the variable interest entity's activities, or entitled to receive a majority of the entity's residual returns, or both. The Company assesses the requirements related to the consolidation of VIEs, including a qualitative assessment of power and economics that considers which entity has the power to direct the activities that “most significantly impact” the VIEs economic performance and has the obligation to absorb losses of, or the right to receive benefits that could be potentially significant to, the VIE. The Company's relationships with VIEs were not material at both December 31, 2014 and 2013. Investments in entities which the Company does not control, but in which it has a substantial ownership interest (generally between 20% and 49%) and can exercise significant influence, are accounted for using the equity method of accounting. At December 31, 2014 and 2013, the Company's investments in affiliates accounted for under the equity method of accounting totaled $46 million and $45 million, respectively. The Company's share of equity earnings from investments in affiliates, accounted for under the equity method, totaled $26 million, $24 million and $26 million for 2014, 2013 and 2012, respectively. All significant intercompany accounts and transactions are eliminated in consolidation. | |||||||
Basis of Presentation | The Company completed the sale of its OralDNA salivary-diagnostics business ("OralDNA") during the fourth quarter of 2012. In addition, in December 2012, the Company committed to a plan to sell its HemoCue diagnostics products business ("HemoCue"). In April 2013, the Company completed the sale of HemoCue. The accompanying consolidated statements of operations and related disclosures have been recast to report the results of OralDNA and HemoCue as discontinued operations for all periods presented. Discontinued operations also includes the operations of NID, a test kit manufacturing subsidiary, which was reported as a discontinued operation in 2006. See Note 18 for a further discussion of discontinued operations. | |||||||
The Company completed the sale of its Enterix colorectal cancer screening test business (“Enterix”) in September 2013. The Enterix business was not reclassified to discontinued operations due to the level of continuing involvement in the Enterix business subsequent to its sale. See Note 6 for a further discussion of the sale of Enterix. | ||||||||
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“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. | |||||||
Revenue Recognition | The Company primarily recognizes revenue for services rendered upon completion of the testing process. Billings for services reimbursed by third-party payers, including Medicare and Medicaid, are recorded as revenues net of allowances for differences between amounts billed and the estimated receipts from such payers. Adjustments to the allowances, based on actual receipts from the third-party payers, are recorded upon settlement. Billings to the Medicare and Medicaid programs were approximately 17%, 18% and 19% of the Company's consolidated net revenues for the years ended December 31, 2014, 2013 and 2012, respectively. Under capitated arrangements with healthcare insurers, the Company recognizes revenue based on a predetermined monthly reimbursement rate for each member of an insurer's health plan regardless of the number or cost of services provided by the Company. In 2014, 2013 and 2012, approximately 3% of the Company's consolidated net revenues were generated under capitated arrangements. | |||||||
Revenues from the Company's risk assessment services, clinical trials testing, healthcare information technology | ||||||||
and diagnostics products businesses are recognized when persuasive evidence of a final agreement exists; delivery has occurred or services have been rendered; the price of the product or service is fixed or determinable; and collectibility from the customer is reasonably assured. | ||||||||
Taxes on Income | The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Current and deferred income taxes are measured based on the tax laws that are enacted as of the balance sheet date of the relevant reporting period. Deferred tax assets and liabilities are recognized for the expected future tax consequences of differences between the carrying amounts of assets and liabilities and their respective tax bases using tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period when the change is enacted. Tax benefits from uncertain tax positions are recognized only if the tax position is more likely than not to be sustained upon examination by taxing authorities based on the technical merits of the position. | |||||||
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 (“ELTIP”) and its Amended and Restated Non-Employee Director Long-Term Incentive Plan (“DLTIP”). 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. | |||||||
Stock-Based Compensation | The Company records stock-based compensation as a charge to earnings net of the estimated impact of forfeited awards. As such, the Company recognizes stock-based compensation cost only for those stock-based awards that are estimated to ultimately vest over their requisite service period, based on the vesting provisions of the individual grants. The cumulative effect on current and prior periods of a change in the estimated forfeiture rate is recognized as compensation cost in earnings in the period of the change. The terms of the Company's performance share unit grants allow the recipients of such awards to earn a variable number of shares based on the achievement of the performance goals specified in the awards. Stock-based compensation expense associated with performance share units is recognized based on management's best estimates of the achievement of the performance goals specified in such awards and the resulting number of shares that will be earned. The cumulative effect on current and prior periods of a change in the estimated number of performance share units expected to be earned is recognized as compensation cost in earnings in the period of the change. The Company recognizes stock-based compensation expense related to the Company's Amended Employee Stock Purchase Plan (“ESPP”) based on the 15% discount at purchase. See Note 16 for a further discussion of stock-based compensation. | |||||||
Fair Value Measurements | The Company determines fair value measurements used in its consolidated financial statements based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs, as determined by either the principal market or the most advantageous market. | |||||||
Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest. | ||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities. | ||||||||
Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. | ||||||||
Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable. | ||||||||
Foreign Currency | The Company predominately uses the U.S. dollar as its functional currency. The functional currency of the Company's foreign subsidiaries generally is the applicable local currency. Assets and liabilities denominated in non-U.S. dollars are translated into U.S. dollars at exchange rates as of the end of the reporting period. Income and expense items are translated at average exchange rates prevailing during the year. The translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Gains and losses from foreign currency transactions are included within other operating (income) expense, net in the consolidated statements of operations. Transaction gains and losses have historically not been material. The Company may be exposed to market risk for changes in foreign exchange rates primarily under certain intercompany receivables and payables. From time to time, the Company uses foreign exchange forward contracts to mitigate the exposure of the eventual net cash inflows or outflows resulting from these intercompany transactions. As a result of the HemoCue disposition, this foreign currency risk has largely been eliminated. The Company's remaining foreign exchange exposure is not material to the Company's consolidated financial condition. The Company does not hedge its net investment in non-U.S. subsidiaries because it views those investments as long term in nature. | |||||||
Cash and Cash Equivalents | Cash and cash equivalents include all highly-liquid investments with original maturities, at the time acquired by the Company, of three months or less. | |||||||
Concentration of Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk are principally cash, cash equivalents, short-term investments, accounts receivable and derivative financial instruments. The Company's policy is to place its cash, cash equivalents and short-term investments in highly-rated financial instruments and institutions. Concentration of credit risk with respect to accounts receivable is mitigated by the diversity of the Company's payers and their dispersion across many different geographic regions, and is limited to certain payers who are large buyers of the Company's services. To reduce risk, the Company routinely assesses the financial strength of these payers and, consequently, believes that its accounts receivable credit risk exposure, with respect to these payers, is limited. While the Company has receivables due from federal and state governmental agencies, the Company does not believe that such receivables represent a credit risk since the related healthcare programs are funded by federal and state governments, and payment is primarily dependent on submitting appropriate documentation. At December 31, 2014 and 2013, receivables due from government payers under the Medicare and Medicaid programs represent approximately 14% and 13%, respectively, of the Company's consolidated net accounts receivable. The portion of the Company's accounts receivable due from patients comprises the largest portion of credit risk. At December 31, 2014 and 2013, receivables due from patients represent approximately 17% and 18%, respectively, of the Company's consolidated net accounts receivable. The Company applies assumptions and judgments including historical collection experience for assessing collectibility and determining allowances for doubtful accounts for accounts receivable from patients. | |||||||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectibility of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues which may impact the collectibility of these receivables or reserve estimates. Changes to the allowances for doubtful accounts estimates are recorded as an adjustment to bad debt expense within selling, general and administrative expenses. Receivables deemed to be uncollectible are charged against the allowance for doubtful accounts at the time such receivables are written-off. Recoveries of receivables previously written-off are recorded as credits to the allowance for doubtful accounts. | |||||||
Inventories | Inventories, which consist principally of testing supplies and reagents, are valued at the lower of cost (first in, first out method) or market. | |||||||
Property, Plant and Equipment | Property, plant and equipment is recorded at cost. Major renewals and improvements are capitalized, while maintenance and repairs are expensed as incurred. Costs incurred for computer software developed or obtained for internal use are capitalized for application development activities and expensed as incurred for preliminary project activities and post-implementation activities. Capitalized costs include external direct costs of materials and services consumed in developing or obtaining internal-use software, payroll and payroll-related costs for employees who are directly associated with the internal-use software project, and interest costs incurred, when material, while developing internal-use software. Capitalization of such costs ceases when the project is substantially complete and ready for its intended purpose. Costs for maintenance and training are expensed as incurred. The Company capitalizes interest on borrowings during the active construction period of major capital projects. Capitalized interest is added to the cost of the underlying assets and is amortized over the expected useful lives of the assets. Depreciation and amortization are provided on the straight-line method over expected useful asset lives as follows: buildings and improvements, ranging up to thirty-one and a half years; laboratory equipment and furniture and fixtures, ranging from three to seven years; leasehold improvements, the lesser of the useful life of the improvement or the remaining life of the building or lease, as applicable; and computer software developed or obtained for internal use, ranging from three to five years | |||||||
Goodwill and Intangible Assets | Goodwill | |||||||
Goodwill represents the excess of the fair value of the acquiree (including the fair value of non-controlling interests) over the recognized bases of the net identifiable assets acquired and includes the future economic benefits from other assets that could not be individually identified and separately recognized. Goodwill is not amortized, but instead is periodically reviewed for impairment. | ||||||||
Intangible Assets | ||||||||
Intangible assets are recognized at fair value, as an asset apart from goodwill if the asset arises from contractual or other legal rights, or if it is separable. Intangible assets, principally representing the cost of customer related intangibles, non-competition agreements and technology acquired, are capitalized and amortized on the straight-line method over their expected useful life, which generally ranges from five to twenty years. Intangible assets with indefinite useful lives, consisting principally of acquired tradenames, are not amortized, but instead are periodically reviewed for impairment. | ||||||||
Recoverability and Impairment of Goodwill, Intangible Assets and Other Long-Lived Assets | The Company reviews goodwill periodically for impairment and an impairment charge is recorded in the periods in which the recorded carrying value of goodwill is more than its implied fair value. The goodwill test is performed at least annually, or more frequently, in the case of other events that indicate a potential impairment. | |||||||
The annual impairment test includes an option to perform a qualitative assessment of whether it is more-likely-than-not that a reporting unit's fair value is less than its carrying value prior to, or as an alternative to, performing the two-step quantitative goodwill impairment test. The quantitative impairment test is a two-step process that begins with the estimation of the fair value of the reporting unit. The first step screens for potential impairment and the second step measures the amount of the impairment, if any. The fair value of the reporting unit is based upon a discounted cash flows analysis that converts future cash flow amounts into a single discounted present value amount. This approach includes several unobservable inputs related to the Company's own assumptions. The assumptions and estimates used in the discounted cash flows model are based upon the best available information in the circumstances and include a forecast of expected future cash flows, long-term growth rates, discount rates that are commensurate with economic risks, assumed income tax rates and estimates of capital expenditures and working capital. The discount rate that is used considers a weighted average cost of capital plus an appropriate risk premium based upon the reporting unit being valued. Management's analysis also considers publicly available information regarding the market capitalization of the Company as well as (i) the financial projections and future prospects of the Company's business, including its growth opportunities and likely operational improvements, and (ii) comparable sales prices, if available. Management believes its estimation methods are reasonable and reflective of common valuation practices. As part of the first step to assess potential impairment, management compares the estimate of fair value for the reporting unit to the book value of the reporting unit. If the book value is greater than the estimate of fair value, the Company would then proceed to the second step to measure the impairment, if any. The second step compares the implied fair value of goodwill with its carrying value. The implied fair value is determined by allocating the fair value of the reporting unit to all of the assets and liabilities of that unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the purchase price paid to acquire the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to its assets and liabilities is the implied fair value of goodwill. If the carrying amount of the reporting unit's goodwill is greater than its implied fair value, an impairment loss will be recognized in the amount of the excess. | ||||||||
On a quarterly basis, management performs a review of the Company's business to determine if events or changes in circumstances have occurred which could have a material adverse effect on the fair value of the Company and its goodwill. If such events or changes in circumstances were deemed to have occurred, the Company would perform an impairment test of goodwill as of the end of the quarter, consistent with the annual impairment test, and record any noted impairment loss. | ||||||||
Based upon the Company’s most recent annual impairment test completed during the fourth quarter of the fiscal year ended December 31, 2014, the Company concluded that goodwill was not impaired. | ||||||||
Recoverability and Impairment of Intangible Assets and Other Long-Lived Assets | ||||||||
The Company reviews indefinite-lived intangible assets periodically for impairment and an impairment charge is recorded in the periods in which the recorded carrying value of indefinite-lived intangibles is more than its estimated fair value. The indefinite-lived intangible asset impairment test is performed at least annually, or more frequently in the case of other events that indicate a potential impairment. | ||||||||
Based upon the Company’s most recent annual impairment test completed during the fourth quarter of the fiscal year ended December 31, 2014, the Company concluded that indefinite-lived intangible assets were not impaired. | ||||||||
The Company reviews the recoverability of its long-lived assets (including amortizable intangible assets), other than goodwill and indefinite-lived intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. Evaluation of possible impairment is based on the Company's ability to recover the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If the expected undiscounted pre-tax cash flows are less than the carrying amount of such asset, an impairment loss is recognized for the difference between the estimated fair value and carrying amount of the asset. | ||||||||
Investments | The Company accounts for investments in trading and available-for-sale equity securities, which are included in other assets in the consolidated balance sheets, at fair value. Both realized and unrealized gains and losses for trading securities are recorded currently in earnings as a component of non-operating expenses within other income, net in the consolidated statements of operations. Unrealized gains and losses, net of tax, for available-for-sale securities are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Recognized gains and losses for available-for-sale securities are recorded in other income, net in the consolidated statements of operations. Gains and losses on securities sold are based on the average cost method. | |||||||
The Company periodically reviews its investments to determine whether a decline in fair value below the cost basis is other than temporary. The primary factors considered in the determination are: the length of time that the fair value of the investment is below carrying value; the financial condition, operating performance and near term prospects of the investee; and the Company's intent and ability to hold the investment for a period of time sufficient to allow for a recovery in fair value. If the decline in fair value is deemed to be other than temporary, the cost basis of the security is written down to fair value. | ||||||||
Investments at December 31, 2014 and 2013 consisted of the following: | ||||||||
2014 | 2013 | |||||||
Available-for-sale equity securities | $ | 9 | $ | — | ||||
Trading equity securities | 49 | 50 | ||||||
Cash surrender value of life insurance policies | 30 | 29 | ||||||
Other investments | 8 | 13 | ||||||
Total | $ | 96 | $ | 92 | ||||
Investments in available-for-sale equity securities consist of equity securities in public corporations. Investments in trading equity securities represent participant-directed investments of deferred employee compensation and related Company matching contributions held in trusts pursuant to the Company's supplemental deferred compensation plans (see Note 16). The Company purchases life insurance policies, with the Company named as beneficiary of the policies, for the purpose of funding a non-qualified deferred compensation program. Changes in the cash surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying investments. Other investments do not have readily determinable fair values and consist of investments in preferred and common shares of privately held companies and are accounted for under the cost method. | ||||||||
At December 31, 2014, the Company had gross unrealized gains from available-for-sale equity securities of approximately $2 million. For the years ended December 31, 2014, 2013 and 2012 gains from trading equity securities totaled $3 million, $7 million, and $5 million, respectively, and are included in other income, net. For the years ended December 31, 2014, 2013 and 2012 gains from changes in the cash surrender value of life insurance policies totaled $1 million, $3 million and $2 million, respectively, and are included in other income, net. | ||||||||
Derivative Financial Instruments | The Company uses derivative financial instruments to manage its exposure to market risks for changes in interest rates and, from time to time, 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. | |||||||
The Company accounts for these derivatives as either an asset or liability measured at its fair value. The fair value is based upon model-derived valuations in which all significant inputs are observable in active markets and includes an adjustment for the credit risk of the obligor's non-performance. For a derivative instrument that has been formally designated as a fair value hedge, fair value gains or losses on the derivative instrument are reported in earnings, together with offsetting fair value gains or losses on the hedged item that are attributable to the risk being hedged. For derivatives that have been formally designated as a cash flow hedge, the effective portion of changes in the fair value of the derivatives is recorded in accumulated other comprehensive loss and the ineffective portion is recorded in earnings. Upon maturity or early termination of an effective interest rate swap designated as a cash flow hedge, unrealized gains or losses are deferred in stockholders' equity, as a component of accumulated other comprehensive loss, and are amortized as an adjustment to interest expense over the period during which the hedged forecasted transaction affects earnings, which is when the Company recognizes interest expense on the hedged cash flows. At inception and quarterly thereafter, the Company formally assesses whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in the fair value or cash flows of the hedged item. All components of each derivative financial instrument's gain or loss are included in the assessment of hedge effectiveness. If it is determined that a derivative ceases to be a highly effective hedge, the Company discontinues hedge accounting and any deferred gains or losses related to a discontinued cash flow hedge shall continue to be reported in accumulated other comprehensive loss, unless it is probable that the forecasted transaction will not occur. If it is probable that the forecasted transaction will not occur by the originally specified time period, the Company discontinues hedge accounting, and any deferred gains or losses reported in accumulated other comprehensive loss are classified into earnings immediately. | ||||||||
Comprehensive Income (Loss) | Comprehensive income (loss) encompasses all changes in stockholders' equity (except those arising from transactions with stockholders) and includes net income, net unrealized gains or losses on available-for-sale securities, foreign currency translation adjustments and deferred gains and losses related to certain derivative financial instruments (see Note 15). | |||||||
New Accounting Standards | 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 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 operations, financial position, cash flows and disclosures will be assessed as part of any future disposal activity. | |||||||
In May 2014, the FASB issued an ASU on revenue recognition. This ASU outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific guidance from GAAP. The core principle of the revenue recognition standard is to require an entity to recognize as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods or services as it transfers control to its customers. The standard requires additional disclosures including those that are qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This ASU is effective for the Company in the first quarter of 2017 with the option of using a full retrospective method or a modified retrospective method. The Company is currently assessing the impact of the adoption of this ASU on the Company’s results of operations, financial position and cash flows. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounting Policies [Abstract] | ||||||||
Schedule of Investments | Investments at December 31, 2014 and 2013 consisted of the following: | |||||||
2014 | 2013 | |||||||
Available-for-sale equity securities | $ | 9 | $ | — | ||||
Trading equity securities | 49 | 50 | ||||||
Cash surrender value of life insurance policies | 30 | 29 | ||||||
Other investments | 8 | 13 | ||||||
Total | $ | 96 | $ | 92 | ||||
EARNINGS_LOSS_PER_SHARE_Tables
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended | |||||||||||
Dec. 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 is as follows (in millions, except per share data): | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Amounts attributable to Quest Diagnostics’ stockholders: | ||||||||||||
Income from continuing operations | $ | 551 | $ | 814 | $ | 630 | ||||||
Income (loss) from discontinued operations, net of taxes | 5 | 35 | (74 | ) | ||||||||
Net income attributable to Quest Diagnostics’ common stockholders | $ | 556 | $ | 849 | $ | 556 | ||||||
Income from continuing operations | $ | 551 | $ | 814 | $ | 630 | ||||||
Less: Earnings allocated to participating securities | 2 | 3 | 2 | |||||||||
Earnings available to Quest Diagnostics’ common stockholders – basic and diluted | $ | 549 | $ | 811 | $ | 628 | ||||||
Weighted average common shares outstanding – basic | 145 | 152 | 159 | |||||||||
Effect of dilutive securities: | ||||||||||||
Stock options and performance share units | — | 1 | 1 | |||||||||
Weighted average common shares outstanding – diluted | 145 | 153 | 160 | |||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – basic: | ||||||||||||
Income from continuing operations | $ | 3.8 | $ | 5.35 | $ | 3.96 | ||||||
Income (loss) from discontinued operations | 0.03 | 0.23 | (0.47 | ) | ||||||||
Net income | $ | 3.83 | $ | 5.58 | $ | 3.49 | ||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders – diluted: | ||||||||||||
Income from continuing operations | $ | 3.78 | $ | 5.31 | $ | 3.92 | ||||||
Income (loss) from discontinued operations | 0.03 | 0.23 | (0.46 | ) | ||||||||
Net income | $ | 3.81 | $ | 5.54 | $ | 3.46 | ||||||
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: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Stock options and performance share units | 2 | 1 | 2 | |||||||||
RESTRUCTURING_ACTIVITIES_Table
RESTRUCTURING ACTIVITIES (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Restructuring and Related Activities [Abstract] | ||||||||||||
Schedule of Pre-Tax Restructuring Charges | The following table provides a summary of the Company's pre-tax restructuring charges associated with its Invigorate program and other restructuring activities: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Employee separation costs | $ | 31 | $ | 69 | $ | 57 | ||||||
Facility-related costs | 12 | 6 | 1 | |||||||||
Asset impairment charges | 1 | — | 1 | |||||||||
Accelerated vesting of stock-based compensation | — | 1 | 2 | |||||||||
Total restructuring charges | $ | 44 | $ | 76 | $ | 61 | ||||||
Schedule of Activity of Restructuring Liability | The following table summarizes the activity of the restructuring liability as of December 31, 2014 and 2013, which is included in accrued expenses in Note 12: | |||||||||||
Employee Separation Costs | Facility-Related Costs | Total | ||||||||||
Balance, December 31, 2012 | $ | 40 | $ | — | $ | 40 | ||||||
Income statement expense | 69 | 6 | 75 | |||||||||
Cash payments | (81 | ) | (1 | ) | (82 | ) | ||||||
Other / adjustments | 3 | — | 3 | |||||||||
Balance, December 31, 2013 | 31 | 5 | 36 | |||||||||
Income statement expense | 31 | 12 | 43 | |||||||||
Cash payments | (44 | ) | (6 | ) | (50 | ) | ||||||
Balance, December 31, 2014 | $ | 18 | $ | 11 | $ | 29 | ||||||
BUSINESS_ACQUISITIONS_Tables
BUSINESS ACQUISITIONS (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Business Combinations [Abstract] | ||||||||||||
Schedule of Purchase Price Allocation | The following tables summarize the total consideration and the preliminary amounts of assets acquired and liabilities assumed for Solstas and Summit Health described above: | |||||||||||
Solstas | Summit Health | |||||||||||
Cash | $ | 572 | $ | 125 | ||||||||
Estimated fair value of contingent consideration | — | 22 | ||||||||||
Transaction related costs due to sellers | — | 5 | ||||||||||
Total consideration | $ | 572 | $ | 152 | ||||||||
Solstas | Summit Health | |||||||||||
Allocation of purchase price: | Fair Value | Weighted Average Useful Life (in years) | Fair Value | Weighted Average Useful Life (in years) | ||||||||
Cash and cash equivalents | $ | 9 | $ | 1 | ||||||||
Accounts receivable, net | 48 | 9 | ||||||||||
Current deferred income taxes | 7 | — | ||||||||||
Other current assets | 12 | 16 | ||||||||||
Property, plant and equipment, net | 49 | 6 | ||||||||||
Goodwill | 270 | 92 | ||||||||||
Intangible assets: | ||||||||||||
Customer relationships | 203 | 20 | 33 | 15 | ||||||||
Tradename | 7 | 2 | 2 | 1 | ||||||||
Software | — | 3 | 4 | |||||||||
Total intangible assets | 210 | 38 | ||||||||||
Non-current deferred income taxes | 42 | — | ||||||||||
Total assets acquired | 647 | 162 | ||||||||||
Current liabilities | 63 | 10 | ||||||||||
Non-current deferred income taxes | 4 | — | ||||||||||
Other non-current liabilities | 8 | — | ||||||||||
Total liabilities assumed | 75 | 10 | ||||||||||
Net assets acquired | $ | 572 | $ | 152 | ||||||||
Schedule of Pro Forma Information | ||||||||||||
2014 | 2013 | |||||||||||
(unaudited) | ||||||||||||
Pro forma net revenues | $ | 7,520 | $ | 7,622 | ||||||||
Pro forma income from continuing operations | $ | 585 | $ | 855 | ||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: | ||||||||||||
Pro forma income from continuing operations | $ | 3.79 | $ | 5.4 | ||||||||
Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: | ||||||||||||
Pro forma income from continuing operations | $ | 3.77 | $ | 5.36 | ||||||||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended | |||||||||||||||
Dec. 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 | ||||||||||||||||
December 31, 2014 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | ||||||||||||||||
Trading securities | $ | 49 | $ | 49 | $ | — | $ | — | ||||||||
Cash surrender value of life insurance policies | 30 | — | 30 | — | ||||||||||||
Interest rate swaps | 17 | — | 17 | — | ||||||||||||
Available-for-sale equity securities | 9 | 9 | — | — | ||||||||||||
Put Option | 1 | — | — | 1 | ||||||||||||
Total | $ | 106 | $ | 58 | $ | 47 | $ | 1 | ||||||||
Liabilities: | ||||||||||||||||
Deferred compensation liabilities | $ | 85 | $ | — | $ | 85 | $ | — | ||||||||
Contingent consideration | 17 | — | — | 17 | ||||||||||||
Forward starting interest rate swaps | 15 | — | 15 | — | ||||||||||||
Interest rate swaps | 13 | — | 13 | — | ||||||||||||
Call option | 5 | — | — | 5 | ||||||||||||
Total | $ | 135 | $ | — | $ | 113 | $ | 22 | ||||||||
December 31, 2013 | ||||||||||||||||
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 | ||||||||
Reconciliation of Beginning and Ending Asset Balances Unobservable Inputs | The following table provides a reconciliation of the beginning and ending balances of assets using significant unobservable inputs (Level 3): | |||||||||||||||
Available-for-Sale Equity Securities | Put Option Derivative Asset | Total | ||||||||||||||
Balance, December 31, 2012 | $ | 1 | $ | — | $ | 1 | ||||||||||
Purchases, additions and issuances | — | 8 | 8 | |||||||||||||
Total gains (losses) - realized/ unrealized: | ||||||||||||||||
Included in earnings | — | (4 | ) | (4 | ) | |||||||||||
Included in other comprehensive income (loss) | (1 | ) | — | (1 | ) | |||||||||||
Balance, December 31, 2013 | — | 4 | 4 | |||||||||||||
Total gains (losses) - realized/ unrealized: | ||||||||||||||||
Included in earnings | — | (3 | ) | (3 | ) | |||||||||||
Balance, December 31, 2014 | $ | — | $ | 1 | $ | 1 | ||||||||||
Reconciliation of Beginning and Ending Liability Balances Unobservable Inputs | ||||||||||||||||
Contingent Consideration | Call Option Derivative Liability | Total | ||||||||||||||
Balance, December 31, 2012 | $ | — | $ | — | $ | — | ||||||||||
Purchases, additions and issuances | — | 11 | 11 | |||||||||||||
Total (gains) losses - realized/ unrealized: | ||||||||||||||||
Included in earnings | — | (3 | ) | (3 | ) | |||||||||||
Balance, December 31, 2013 | — | 8 | 8 | |||||||||||||
Purchases, additions and issuances | 26 | — | 26 | |||||||||||||
Total (gains) losses - realized/ unrealized: | ||||||||||||||||
Included in earnings | (9 | ) | (3 | ) | (12 | ) | ||||||||||
Balance, December 31, 2014 | $ | 17 | $ | 5 | $ | 22 | ||||||||||
TAXES_ON_INCOME_TAXES_ON_INCOM
TAXES ON INCOME TAXES ON INCOME (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Components of Income Tax Expense | The components of income tax expense from continuing operations for 2014, 2013 and 2012 were as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Current: | ||||||||||||
Federal | $ | 204 | $ | 417 | $ | 332 | ||||||
State and local | 34 | 59 | 61 | |||||||||
Foreign | 3 | 4 | 3 | |||||||||
Deferred: | ||||||||||||
Federal | 28 | 27 | 13 | |||||||||
State and local | (6 | ) | (6 | ) | (6 | ) | ||||||
Foreign | (1 | ) | (1 | ) | (1 | ) | ||||||
Total | $ | 262 | $ | 500 | $ | 402 | ||||||
Reconciliation of the Federal Statutory Rate | A reconciliation of the federal statutory rate to the Company's effective tax rate for 2014, 2013 and 2012 was as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Tax provision at statutory rate | 35 | % | 35 | % | 35 | % | ||||||
State and local income taxes, net of federal benefit | 3.1 | 2.8 | 3.4 | |||||||||
Impact of foreign operations | (0.2 | ) | (0.3 | ) | (0.3 | ) | ||||||
Tax credits | (0.8 | ) | (0.4 | ) | (0.2 | ) | ||||||
Adjustments to unrecognized tax positions (the net benefit mainly results from favorable resolution of certain tax contingencies) | (4.9 | ) | 1.4 | 1.2 | ||||||||
Non-deductible expenses, primarily meals and entertainment expenses | 0.4 | 0.3 | 0.3 | |||||||||
Impact of noncontrolling interests | (1.6 | ) | (1.0 | ) | (1.3 | ) | ||||||
Other, net | (0.1 | ) | (0.7 | ) | (0.5 | ) | ||||||
Effective tax rate | 30.9 | % | 37.1 | % | 37.6 | % | ||||||
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) at December 31, 2014 and 2013 were as follows: | |||||||||||
2014 | 2013 | |||||||||||
Current deferred tax assets: | ||||||||||||
Accounts receivable reserves | $ | 91 | $ | 85 | ||||||||
Liabilities not currently deductible | 78 | 63 | ||||||||||
Total current deferred tax assets | $ | 169 | $ | 148 | ||||||||
Non-current deferred tax assets (liabilities): | ||||||||||||
Liabilities not currently deductible | $ | 138 | $ | 144 | ||||||||
Stock-based compensation | 42 | 43 | ||||||||||
Capitalized R&D expense | 3 | 6 | ||||||||||
Net operating loss carryforwards, net of valuation allowance | 165 | 114 | ||||||||||
Depreciation and amortization | (519 | ) | (475 | ) | ||||||||
Total non-current deferred tax liabilities, net | $ | (171 | ) | $ | (168 | ) | ||||||
Schedule of Unrecognized Benefits | The total amount of unrecognized tax benefits as of and for the years ended December 31, 2014, 2013 and 2012 consisted of the following: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Balance, beginning of year | $ | 168 | $ | 199 | $ | 195 | ||||||
Additions: | ||||||||||||
For tax positions of current year | 17 | 11 | 12 | |||||||||
For tax positions of prior years | 1 | 12 | 10 | |||||||||
Reductions: | ||||||||||||
Changes in judgment | (56 | ) | (23 | ) | (2 | ) | ||||||
Expirations of statutes of limitations | (6 | ) | (2 | ) | (6 | ) | ||||||
Settlements | (2 | ) | (29 | ) | (10 | ) | ||||||
Balance, end of year | $ | 122 | $ | 168 | $ | 199 | ||||||
SUPPLEMENTAL_CASH_FLOW_OTHER_D1
SUPPLEMENTAL CASH FLOW & OTHER DATA (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||
Supplemental Cash Flow and Other Data | Supplemental cash flow data for the years ended December 31, 2014, 2013 and 2012 was as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Depreciation expense | $ | 220 | $ | 204 | $ | 207 | ||||||
Amortization expense | 94 | 79 | 80 | |||||||||
Interest paid | 170 | 167 | 163 | |||||||||
Income taxes paid | 327 | 568 | 305 | |||||||||
Assets acquired under capital leases | 12 | 13 | 6 | |||||||||
Account payable associated with capital expenditures | 26 | 28 | — | |||||||||
Dividend payable | 48 | 43 | 48 | |||||||||
Businesses acquired: | ||||||||||||
Fair value of assets acquired | 853 | 280 | 51 | |||||||||
Fair value of liabilities assumed | 85 | 16 | — | |||||||||
Fair value of net assets acquired | 768 | 264 | 51 | |||||||||
Merger consideration paid (payable) | (30 | ) | (50 | ) | — | |||||||
Cash paid for business acquisitions | 738 | 214 | 51 | |||||||||
Less: Cash acquired | 10 | 1 | — | |||||||||
Business acquisitions, net of cash acquired | $ | 728 | $ | 213 | $ | 51 | ||||||
Schedule of Supplemental Disclosures, Continuing Operations | Supplemental continuing operations data for the statement of operations for the years ended December 31, 2014, 2013 and 2012 was as follows: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Depreciation expense | $ | 220 | $ | 203 | $ | 204 | ||||||
Interest expense | (167 | ) | (162 | ) | (168 | ) | ||||||
Interest income | 3 | 3 | 3 | |||||||||
Interest expense, net | $ | (164 | ) | $ | (159 | ) | $ | (165 | ) |
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Property, Plant and Equipment | Property, plant and equipment at December 31, 2014 and 2013 consisted of the following: | |||||||
2014 | 2013 | |||||||
Land | $ | 28 | $ | 30 | ||||
Buildings and improvements | 367 | 365 | ||||||
Laboratory equipment, furniture and fixtures | 1,386 | 1,248 | ||||||
Leasehold improvements | 538 | 452 | ||||||
Computer software developed or obtained for internal use | 675 | 581 | ||||||
Construction-in-progress | 132 | 130 | ||||||
3,126 | 2,806 | |||||||
Less: Accumulated depreciation and amortization | (2,193 | ) | (2,001 | ) | ||||
Total | $ | 933 | $ | 805 | ||||
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||
Changes in Goodwill, Net | The changes in goodwill for the years ended December 31, 2014 and 2013 were as follows: | |||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||||
Balance, beginning of year | $ | 5,649 | $ | 5,536 | ||||||||||||||||||||||
Goodwill acquired during the year | 383 | 150 | ||||||||||||||||||||||||
Write-off associated with sale of business during the year | — | (37 | ) | |||||||||||||||||||||||
Balance, end of year | $ | 6,032 | $ | 5,649 | ||||||||||||||||||||||
Intangible Assets Excluding Goodwill | Intangible assets at December 31, 2014 and 2013 consisted of the following: | |||||||||||||||||||||||||
Weighted | December 31, 2014 | December 31, 2013 | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||||
Amort-ization | ||||||||||||||||||||||||||
Period (Years) | ||||||||||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | |||||||||||||||||||||
Amortization | Amortization | |||||||||||||||||||||||||
Amortizing intangible assets: | ||||||||||||||||||||||||||
Customer-related intangibles | 18 | $ | 929 | $ | (259 | ) | $ | 670 | $ | 670 | $ | (210 | ) | $ | 460 | |||||||||||
Non-compete agreements | 4 | 43 | (37 | ) | 6 | 43 | (27 | ) | 16 | |||||||||||||||||
Technology | 14 | 118 | (38 | ) | 80 | 119 | (28 | ) | 91 | |||||||||||||||||
Other | 8 | 152 | (82 | ) | 70 | 141 | (57 | ) | 84 | |||||||||||||||||
Total | 16 | 1,242 | (416 | ) | 826 | 973 | (322 | ) | 651 | |||||||||||||||||
Intangible assets not subject to amortization: | ||||||||||||||||||||||||||
Tradenames | 244 | — | 244 | 244 | — | 244 | ||||||||||||||||||||
Other | 1 | — | 1 | 1 | — | 1 | ||||||||||||||||||||
Total intangible assets | $ | 1,487 | $ | (416 | ) | $ | 1,071 | $ | 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 December 31, 2014 is as follows: | |||||||||||||||||||||||||
Year Ending December 31, | ||||||||||||||||||||||||||
2015 | $ | 85 | ||||||||||||||||||||||||
2016 | 74 | |||||||||||||||||||||||||
2017 | 71 | |||||||||||||||||||||||||
2018 | 64 | |||||||||||||||||||||||||
2019 | 62 | |||||||||||||||||||||||||
Thereafter | 470 | |||||||||||||||||||||||||
Total | $ | 826 | ||||||||||||||||||||||||
ACCOUNTS_PAYABLE_AND_ACCRUED_E1
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ||||||||
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses at December 31, 2014 and 2013 consisted of the following: | |||||||
2014 | 2013 | |||||||
Trade accounts payable | $ | 257 | $ | 258 | ||||
Accrued wages and benefits, including incentive compensation | 364 | 283 | ||||||
Income taxes payable | 63 | 7 | ||||||
Accrued interest | 67 | 61 | ||||||
Accrued insurance | 59 | 30 | ||||||
Merger consideration payable | 56 | 1 | ||||||
Dividend payable | 48 | 43 | ||||||
Accrued expenses | 277 | 237 | ||||||
Total | $ | 1,191 | $ | 920 | ||||
DEBT_Tables
DEBT (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Debt Instruments [Abstract] | ||||||||
Long-term Debt | Long-term debt at December 31, 2014 and 2013 consisted of the following: | |||||||
2014 | 2013 | |||||||
Floating Rate Senior Notes due March 2014 (bearing interest at three-month LIBOR plus 0.85%) | $ | — | $ | 200 | ||||
5.45% Senior Notes due November 2015 | 500 | 500 | ||||||
3.20% Senior Notes due April 2016 | 304 | 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 | 524 | 520 | ||||||
4.70% Senior Notes due April 2021 | 549 | 533 | ||||||
4.25% Senior Notes due April 2024 | 311 | — | ||||||
6.95% Senior Notes due July 2037 | 421 | 421 | ||||||
5.75% Senior Notes due January 2040 | 439 | 439 | ||||||
Other | 39 | 37 | ||||||
Total long-term debt | 3,762 | 3,332 | ||||||
Less: current portion of long-term debt | 518 | 212 | ||||||
Total long-term debt, net of current portion | $ | 3,244 | $ | 3,120 | ||||
Schedule of Maturities of Long-term Debt | As of December 31, 2014, long-term debt maturing in each of the years subsequent to December 31, 2015 was as follows: | |||||||
Year Ending December 31, | ||||||||
2016 | $ | 309 | ||||||
2017 | 381 | |||||||
2018 | 4 | |||||||
2019 | 301 | |||||||
2020 | 500 | |||||||
Thereafter | 1,726 | |||||||
Total maturities of long-term debt | 3,221 | |||||||
Unamortized discount | (20 | ) | ||||||
Fair value basis adjustments attributable to hedged debt | 43 | |||||||
Total long-term debt, net of current portion | $ | 3,244 | ||||||
FINANCIAL_INSTRUMENTS_Tables
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||
Schedule of Notional Amounts of Outstanding Derivative Positions | A summary of the outstanding notional amounts of interest rate derivatives – cash flow hedges as of December 31, 2014 and 2013 is as follows: | |||||||||||
Notional Amount | ||||||||||||
2014 | 2013 | |||||||||||
Forward Starting Interest Rate Swaps | $ | 150 | $ | 100 | ||||||||
Schedule of Derivative Instruments | 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. A summary of the notional amounts of interest rate derivatives – fair value hedges as of December 31, 2014 and 2013 is as follows: | |||||||||||
Floating Rate | Notional Amount | |||||||||||
Debt Instrument | Paid by the Company | 2014 | 2013 | |||||||||
3.20% Senior Notes due April 2016 | Six-month LIBOR plus a 2.3% spread | $ | 200 | $ | 200 | |||||||
4.75% Senior Notes due January 2020 | One-month LIBOR plus a 3.6% spread | 350 | 350 | |||||||||
4.70% Senior Notes due April 2021 | One-month LIBOR plus a 2.45% to 3.39% spread | 400 | 400 | |||||||||
4.25% Senior Notes due April 2024 | One-month LIBOR plus a 1.54% to 1.59% spread | 250 | — | |||||||||
$ | 1,200 | $ | 950 | |||||||||
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: | |||||||||||
December 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 | $ | 17 | $ | — | |||||||
Forward starting interest rate swaps | — | Other assets | 2 | |||||||||
Total Asset Derivatives | 17 | 2 | ||||||||||
Liability Derivatives: | ||||||||||||
Interest rate swaps | Other liabilities | 13 | Other liabilities | 34 | ||||||||
Forward starting interest rate swaps | Other liabilities | 15 | — | |||||||||
Total Liability Derivatives | 28 | 34 | ||||||||||
Derivatives Not Designated as Hedging Instruments | ||||||||||||
Asset Derivatives: | ||||||||||||
Put option | Prepaid expenses and other current assets | 1 | Other assets | 4 | ||||||||
Liability Derivatives: | ||||||||||||
Call option | Accounts payable and accrued expenses | 5 | Other liabilities | 8 | ||||||||
Total Net Derivatives Liabilities | $ | (15 | ) | $ | (36 | ) |
PREFERRED_STOCK_AND_COMMON_STO1
PREFERRED STOCK AND COMMON STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||
Components of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive loss by component for 2014, 2013 and 2012 were as follows: | |||||||||||||||||||
Foreign | Market Value | Net Deferred Loss on Cash Flow Hedges | Other | Accumulated Other Comprehensive (Loss) Income | ||||||||||||||||
Currency | Adjustment | |||||||||||||||||||
Translation | ||||||||||||||||||||
Adjustment | ||||||||||||||||||||
Balance, December 31, 2011 | $ | 1 | $ | 1 | $ | (8 | ) | $ | (2 | ) | $ | (8 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 24 | — | — | (3 | ) | 21 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | — | — | 1 | — | 1 | |||||||||||||||
Net current period other comprehensive income (loss) | 24 | — | 1 | (3 | ) | 22 | ||||||||||||||
Balance, December 31, 2012 | 25 | 1 | (7 | ) | (5 | ) | 14 | |||||||||||||
Other comprehensive income (loss) before reclassifications | 2 | (1 | ) | 1 | 1 | 3 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (29 | ) | — | 1 | 3 | (25 | ) | |||||||||||||
Net current period other comprehensive (loss) income | (27 | ) | (1 | ) | 2 | 4 | (22 | ) | ||||||||||||
Balance, December 31, 2013 | (2 | ) | — | (5 | ) | (1 | ) | (8 | ) | |||||||||||
Other comprehensive loss before reclassifications | (7 | ) | (1 | ) | (11 | ) | (1 | ) | (20 | ) | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | — | 1 | — | 1 | |||||||||||||||
Net current period other comprehensive loss | (7 | ) | (1 | ) | (10 | ) | (1 | ) | (19 | ) | ||||||||||
Balance, December 31, 2014 | $ | (9 | ) | $ | (1 | ) | $ | (15 | ) | $ | (2 | ) | $ | (27 | ) |
STOCK_OWNERSHIP_AND_COMPENSATI1
STOCK OWNERSHIP AND COMPENSATION PLANS (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||
Schedule of Assumptions Used in Valuing The Company's Stock Options | The weighted average assumptions used in valuing options granted in the periods presented are: | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Weighted average fair value of options at grant date | $10.99 | $12.64 | $15.87 | ||||||||||||||||||
Expected volatility | 25.10% | 25.80% | 27% | ||||||||||||||||||
Dividend yield | 2.10% | 1.40% | 0.90% | ||||||||||||||||||
Risk-free interest rate | 1.6% - 2.0% | 1.1% - 1.3% | 1.3% - 1.5% | ||||||||||||||||||
Expected holding period, in years | 5.5 - 6.6 | 5.5 - 6.7 | 6.7 - 7.5 | ||||||||||||||||||
Summary of Transactions Under The Company's Stock Option Plans | Transactions under the stock option plans for 2014 were as follows: | ||||||||||||||||||||
Shares | Weighted | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value | ||||||||||||||||||
(in millions) | Average Exercise Price | (in years) | |||||||||||||||||||
Options outstanding, beginning of year | 6.3 | $ | 54.2 | ||||||||||||||||||
Options granted | 2.5 | 52.39 | |||||||||||||||||||
Options exercised | (1.5 | ) | 51.65 | ||||||||||||||||||
Options forfeited and canceled | (0.7 | ) | 50.47 | ||||||||||||||||||
Options outstanding, end of year | 6.6 | $ | 54.46 | 7.3 | $ | 83 | |||||||||||||||
Exercisable, end of year | 3.1 | $ | 55 | 5.6 | $ | 37 | |||||||||||||||
Vested and expected to vest, end of year | 6.4 | $ | 54.5 | 7.2 | $ | 81 | |||||||||||||||
Summary of Transactions Under Stock Awards Other Than Option Awards | The following summarizes the activity relative to stock awards, including restricted stock awards, restricted stock units and performance share units, for 2014, 2013 and 2012: | ||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Shares | Weighted | Shares | Weighted | Shares | Weighted | ||||||||||||||||
(in millions) | Average | (in millions) | Average | (in millions) | Average | ||||||||||||||||
Grant Date | Grant Date | Grant Date | |||||||||||||||||||
Fair Value | Fair Value | Fair Value | |||||||||||||||||||
Shares outstanding, beginning of year | 0.7 | $ | 57.2 | 1.2 | $ | 56.84 | 2 | $ | 54.61 | ||||||||||||
Shares granted | 0.7 | 52.72 | 0.8 | 56.79 | 0.8 | 57.78 | |||||||||||||||
Shares vested | (0.3 | ) | 57.14 | (0.5 | ) | 56.25 | (0.9 | ) | 52.62 | ||||||||||||
Shares forfeited and canceled | — | — | (0.1 | ) | 56.92 | (0.1 | ) | 57.09 | |||||||||||||
Adjustment to estimate of performance share units to be earned | 0.1 | 56.1 | (0.7 | ) | 56.84 | (0.6 | ) | 57.06 | |||||||||||||
Shares outstanding, end of year | 1.2 | $ | 54.37 | 0.7 | $ | 57.2 | 1.2 | $ | 56.84 | ||||||||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Minimum Rental Commitments Under Noncancelable Operating Leases Disclosure | Minimum rental commitments under noncancelable operating leases, primarily real estate, in effect at December 31, 2014 are as follows: | |||
Year Ending December 31, | ||||
2015 | $ | 193 | ||
2016 | 148 | |||
2017 | 104 | |||
2018 | 66 | |||
2019 | 47 | |||
2020 and thereafter | 163 | |||
Minimum lease payments | 721 | |||
Noncancelable sub-lease income | — | |||
Net minimum lease payments | $ | 721 | ||
DISCONTINUED_OPERATIONS_Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||
Summarized Financial Information for Discontinued Operations | Summarized financial information for the discontinued operations is set forth below: | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Net revenues | $ | — | $ | 28 | $ | 117 | ||||||
Income (loss) from discontinued operations before taxes | 1 | 25 | (74 | ) | ||||||||
Income tax expense benefit | (4 | ) | (10 | ) | — | |||||||
Income (loss) from discontinued operations, net of taxes | $ | 5 | $ | 35 | $ | (74 | ) | |||||
BUSINESS_SEGMENT_INFORMATION_T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Segment Reporting [Abstract] | ||||||||||||
Summary of Segment Reporting Information by Segment | The following table is a summary of segment information for the years ended December 31, 2014, 2013 and 2012. Segment asset information is not presented since it is not used by the chief operating decision maker at the operating segment level. Operating earnings (loss) of each segment represents net revenues less directly identifiable expenses to arrive at operating income for the segment. General corporate activities included in the table below are comprised of general management and administrative corporate expenses, amortization of intangibles assets, other miscellaneous operating income and expenses, net of certain general corporate activity costs that are allocated to the DIS and DS businesses, and the third quarter of 2013 pre-tax gain on the sale of the ibrutinib royalty rights and the pre-tax loss on the sale of Enterix (see Note 6). The accounting policies of the segments are the same as those of the Company as set forth in Note 2. | |||||||||||
2014 | 2013 | 2012 | ||||||||||
Net revenues: | ||||||||||||
DIS business | $ | 6,873 | $ | 6,587 | $ | 6,820 | ||||||
All other operating segments | 562 | 559 | 563 | |||||||||
Total net revenues | $ | 7,435 | $ | 7,146 | $ | 7,383 | ||||||
Operating earnings (loss): | ||||||||||||
DIS business | $ | 1,068 | $ | 1,201 | $ | 1,370 | ||||||
All other operating segments | 94 | 76 | 67 | |||||||||
General corporate activities | (179 | ) | 198 | (236 | ) | |||||||
Total operating income | 983 | 1,475 | 1,201 | |||||||||
Non-operating expenses, net | (134 | ) | (127 | ) | (133 | ) | ||||||
Income from continuing operations before taxes | 849 | 1,348 | 1,068 | |||||||||
Income tax expense | 262 | 500 | 402 | |||||||||
Income from continuing operations | 587 | 848 | 666 | |||||||||
Income (loss) from discontinued operations, net of taxes | 5 | 35 | (74 | ) | ||||||||
Net income | 592 | 883 | 592 | |||||||||
Less: Net income attributable to noncontrolling interests | 36 | 34 | 36 | |||||||||
Net income attributable to Quest Diagnostics | $ | 556 | $ | 849 | $ | 556 | ||||||
Depreciation Amortization And Capital Expenditures by Segment | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Depreciation and amortization: | ||||||||||||
DIS business | $ | 206 | $ | 189 | $ | 188 | ||||||
All other operating segments | 13 | 12 | 13 | |||||||||
General corporate | 95 | 82 | 77 | |||||||||
314 | 283 | 278 | ||||||||||
Adjustments: Discontinued operations | — | — | 9 | |||||||||
Total depreciation and amortization | $ | 314 | $ | 283 | $ | 287 | ||||||
Capital expenditures: | ||||||||||||
DIS business | $ | 283 | $ | 196 | $ | 145 | ||||||
All other operating segments | 17 | 26 | 24 | |||||||||
General corporate | 8 | 9 | 11 | |||||||||
308 | 231 | 180 | ||||||||||
Adjustments: Discontinued operations | — | — | 2 | |||||||||
Total capital expenditures | $ | 308 | $ | 231 | $ | 182 | ||||||
Quarterly_Operating_Results_un1
Quarterly Operating Results (unaudited) (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Quarterly Financial Data [Abstract] | ||||||||||||||||||||
Quarterly Operating Results | ||||||||||||||||||||
2014 (a) | First | Second | Third | Fourth | Total | |||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||
(b) | (c) | (d) | (e) | |||||||||||||||||
Net revenues | $ | 1,746 | $ | 1,902 | $ | 1,904 | $ | 1,883 | $ | 7,435 | ||||||||||
Gross profit | 645 | 728 | 726 | 699 | 2,798 | |||||||||||||||
Income from continuing operations | 111 | 142 | 139 | 195 | 587 | |||||||||||||||
Income from discontinued operations, net of taxes | — | — | — | 5 | 5 | |||||||||||||||
Net income | 111 | 142 | 139 | 200 | 592 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | 7 | 9 | 10 | 10 | 36 | |||||||||||||||
Net income attributable to Quest Diagnostics | $ | 104 | $ | 133 | $ | 129 | $ | 190 | $ | 556 | ||||||||||
Amounts attributable to Quest Diagnostics' stockholders: | ||||||||||||||||||||
Income from continuing operations | $ | 104 | $ | 133 | $ | 129 | $ | 185 | $ | 551 | ||||||||||
Income from discontinued operations, net of taxes | — | — | — | 5 | 5 | |||||||||||||||
Net income | $ | 104 | $ | 133 | $ | 129 | $ | 190 | $ | 556 | ||||||||||
Earnings per share attributable to Quest Diagnostics' stockholders - basic: | ||||||||||||||||||||
Income from continuing operations | $ | 0.72 | $ | 0.92 | $ | 0.89 | $ | 1.27 | $ | 3.8 | ||||||||||
Income from discontinued operations | — | — | — | 0.03 | 0.03 | |||||||||||||||
Net income | $ | 0.72 | $ | 0.92 | $ | 0.89 | $ | 1.3 | $ | 3.83 | ||||||||||
Earnings per share attributable to Quest Diagnostics' stockholders - diluted: | ||||||||||||||||||||
Income from continuing operations | $ | 0.71 | $ | 0.92 | $ | 0.88 | $ | 1.26 | $ | 3.78 | ||||||||||
Income from discontinued operations | — | — | — | 0.03 | 0.03 | |||||||||||||||
Net income | $ | 0.71 | $ | 0.92 | $ | 0.88 | $ | 1.29 | $ | 3.81 | ||||||||||
2013 (a) | First | Second | Third | Fourth | Total | |||||||||||||||
Quarter | Quarter | Quarter | Quarter | Year | ||||||||||||||||
(f) | (g) | (h) | (i) | |||||||||||||||||
Net revenues | $ | 1,787 | $ | 1,815 | $ | 1,788 | $ | 1,756 | $ | 7,146 | ||||||||||
Gross profit | 695 | 721 | 699 | 705 | 2,820 | |||||||||||||||
Income from continuing operations | 124 | 161 | 412 | 151 | 848 | |||||||||||||||
Income from discontinued operations, net of taxes | 20 | 13 | 2 | — | 35 | |||||||||||||||
Net income | 144 | 174 | 414 | 151 | 883 | |||||||||||||||
Less: Net income attributable to noncontrolling interests | 8 | 9 | 9 | 8 | 34 | |||||||||||||||
Net income attributable to Quest Diagnostics | $ | 136 | $ | 165 | $ | 405 | $ | 143 | $ | 849 | ||||||||||
Amounts attributable to Quest Diagnostics' stockholders: | ||||||||||||||||||||
Income from continuing operations | $ | 116 | $ | 152 | $ | 403 | $ | 143 | $ | 814 | ||||||||||
Income from discontinued operations, net of taxes | 20 | 13 | 2 | — | 35 | |||||||||||||||
Net income | $ | 136 | $ | 165 | $ | 405 | $ | 143 | $ | 849 | ||||||||||
Earnings per share attributable to Quest Diagnostics' stockholders - basic: | ||||||||||||||||||||
Income from continuing operations | $ | 0.73 | $ | 0.99 | $ | 2.68 | $ | 0.98 | $ | 5.35 | ||||||||||
Income (loss) from discontinued operations | 0.13 | 0.08 | 0.02 | (0.01 | ) | 0.23 | ||||||||||||||
Net income | $ | 0.86 | $ | 1.07 | $ | 2.7 | $ | 0.97 | $ | 5.58 | ||||||||||
Earnings per share attributable to Quest Diagnostics' stockholders - diluted: | ||||||||||||||||||||
Income from continuing operations | $ | 0.72 | $ | 0.99 | $ | 2.66 | $ | 0.97 | $ | 5.31 | ||||||||||
Income from discontinued operations | 0.13 | 0.08 | 0.02 | — | 0.23 | |||||||||||||||
Net income | $ | 0.85 | $ | 1.07 | $ | 2.68 | $ | 0.97 | $ | 5.54 | ||||||||||
(a) | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). | |||||||||||||||||||
(b) | Includes pre-tax charges of $24 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $12 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $4 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||
(c) | Includes pre-tax charges of $27 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $16 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $7 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||
(d) | Includes pre-tax charges of $40 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $14 million, $25 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $8 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||
(e) | Includes pre-tax charges of $30 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $13 million, $16 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $5 million, principally representing costs incurred related to legal matters, and a pre-tax gain included in other operating (income) expense, net of $9 million associated with a decrease in the fair value of the contingent consideration accrual associated with the Summit Health acquisition. Income from continuing operations includes a discrete benefit of $44 million associated with the favorable resolution of certain tax contingencies. | |||||||||||||||||||
(f) | Includes pre-tax charges of $45 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $18 million and $27 million were included in cost of services and selling, general and administrative expenses, respectively. | |||||||||||||||||||
(g) | Includes pre-tax charges of $19 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Income from discontinued operations, net of taxes includes a gain on the sale of HemoCue of $14 million (see Note 18). | |||||||||||||||||||
(h) | Includes pre-tax charges of $39 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $28 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax gain on sale of royalty rights of $474 million and the pre-tax loss of $40 million associated with the sale of the Enterix (see Note 6). | |||||||||||||||||||
(i) | Includes pre-tax charges of $12 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $5 million were included in cost of services and selling, general and administrative expenses, respectively. |
DESCRIPTION_OF_BUSINESS_DESCRI
DESCRIPTION OF BUSINESS DESCRIPTION OF BUSINESS (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Description of Business (Abstract) | |
Number of requisitions processed during the period | 156,000,000 |
SUMMARY_OF_SIGNFICANT_ACCOUNTI
SUMMARY OF SIGNFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of Significant Accounting Policies [Line Items] | |||
Goodwill impairment and write-off associated with sale of business | $0 | $37 | |
Equity method investments carrying value | 46 | 45 | |
Share of equity earnings from investments in affiliates | 26 | 24 | 26 |
Percentage of total revenues generated by medicaid and medicare programs | 17.00% | 18.00% | 19.00% |
Percentage of total revenues generated under capitated agreements | 3.00% | 3.00% | 3.00% |
Purchase price discount ESPP | 15.00% | ||
Percentage of accounts receivable due from government payers | 14.00% | 13.00% | |
Percentage of receivables due from patients | 17.00% | 18.00% | |
Available-for-sale equity securities | 9 | 0 | |
Trading equity securities | 49 | 50 | |
Cash surrender value of life insurance policies | 30 | 29 | |
Other investments | 8 | 13 | |
Total | 96 | 92 | |
Gross unrealized gains from available-for-sale equity securities | 2 | ||
Trading equity securities gain or (loss) | 3 | 7 | 5 |
Changes in cash surrender value of life insurance policies | $1 | $3 | $2 |
Minimum [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Equity method investment, ownership percentage | 20.00% | ||
Finite-lived intangible asset, useful life | 5 years | ||
Maximum [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Equity method investment, ownership percentage | 49.00% | ||
Finite-lived intangible asset, useful life | 20 years | ||
Building and Building Improvements [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 31 years 6 months | ||
Laboratory Equipment and Furniture and Fixtures [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Laboratory Equipment and Furniture and Fixtures [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 7 years | ||
Internal Use Software [Member] | Minimum [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 3 years | ||
Internal Use Software [Member] | Maximum [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Property, plant and equipment, useful life | 5 years |
EARNINGS_LOSS_PER_SHARE_Detail
EARNINGS (LOSS) PER SHARE (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||||
Earnings Per Share, Basic and Diluted [Abstract] | |||||||||||||||||||||
Income from continuing operations | $185 | [1],[2] | $129 | [1],[3] | $133 | [1],[4] | $104 | [1],[5] | $143 | [1],[6] | $403 | [1],[7] | $152 | [1],[8] | $116 | [1],[9] | $551 | [1] | $814 | [1] | $630 |
Income (loss) from discontinued operations, net of taxes | 5 | 35 | -74 | ||||||||||||||||||
Net income attributable to Quest Diagnostics’ common stockholders | 190 | [1],[2] | 129 | [1],[3] | 133 | [1],[4] | 104 | [1],[5] | 143 | [1],[6] | 405 | [1],[7] | 165 | [1],[8] | 136 | [1],[9] | 556 | [1] | 849 | [1] | 556 |
Less: Earnings allocated to participating securities | 2 | 3 | 2 | ||||||||||||||||||
Earnings available to Quest Diagnostics' common stockholders - basic and diluted | $549 | $811 | $628 | ||||||||||||||||||
Weighted average common shares outstanding - basic | 145 | 152 | 159 | ||||||||||||||||||
Stock options and performance share units | 0 | 1 | 1 | ||||||||||||||||||
Weighted average common shares outstanding - diluted | 145 | 153 | 160 | ||||||||||||||||||
Income from continuing operations, per basic share | $1.27 | [1],[2] | $0.89 | [1],[3] | $0.92 | [1],[4] | $0.72 | [1],[5] | $0.98 | [1],[6] | $2.68 | [1],[7] | $0.99 | [1],[8] | $0.73 | [1],[9] | $3.80 | [1] | $5.35 | [1] | $3.96 |
Income (loss) from discontinued operations, per basic share | $0.03 | [1],[2] | $0 | [1],[3] | $0 | [1],[4] | $0 | [1],[5] | ($0.01) | [1],[6] | $0.02 | [1],[7] | $0.08 | [1],[8] | $0.13 | [1],[9] | $0.03 | [1] | $0.23 | [1] | ($0.47) |
Net income, per basic share | $1.30 | [1],[2] | $0.89 | [1],[3] | $0.92 | [1],[4] | $0.72 | [1],[5] | $0.97 | [1],[6] | $2.70 | [1],[7] | $1.07 | [1],[8] | $0.86 | [1],[9] | $3.83 | [1] | $5.58 | [1] | $3.49 |
Income from continuing operations, per diluted share | $1.26 | [1],[2] | $0.88 | [1],[3] | $0.92 | [1],[4] | $0.71 | [1],[5] | $0.97 | [1],[6] | $2.66 | [1],[7] | $0.99 | [1],[8] | $0.72 | [1],[9] | $3.78 | [1] | $5.31 | [1] | $3.92 |
Income (loss) from discontinued operations, per diluted share | $0.03 | [1],[2] | $0 | [1],[3] | $0 | [1],[4] | $0 | [1],[5] | $0 | [1],[6] | $0.02 | [1],[7] | $0.08 | [1],[8] | $0.13 | [1],[9] | $0.03 | [1] | $0.23 | [1] | ($0.46) |
Net income, per diluted share | $1.29 | [1],[2] | $0.88 | [1],[3] | $0.92 | [1],[4] | $0.71 | [1],[5] | $0.97 | [1],[6] | $2.68 | [1],[7] | $1.07 | [1],[8] | $0.85 | [1],[9] | $3.81 | [1] | $5.54 | [1] | $3.46 |
Stock options and performance share units not included due to their antidilutive effect | 2 | 1 | 2 | ||||||||||||||||||
[1] | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). | ||||||||||||||||||||
[2] | Includes pre-tax charges of $30 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $13 million, $16 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $5 million, principally representing costs incurred related to legal matters, and a pre-tax gain included in other operating (income) expense, net of $9 million associated with a decrease in the fair value of the contingent consideration accrual associated with the Summit Health acquisition. Income from continuing operations includes a discrete benefit of $44 million associated with the favorable resolution of certain tax contingencies. | ||||||||||||||||||||
[3] | Includes pre-tax charges of $40 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $14 million, $25 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $8 million, principally representing costs incurred related to legal matters. | ||||||||||||||||||||
[4] | Includes pre-tax charges of $27 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $16 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $7 million, principally representing costs incurred related to legal matters. | ||||||||||||||||||||
[5] | Includes pre-tax charges of $24 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $12 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $4 million, principally representing costs incurred related to legal matters. | ||||||||||||||||||||
[6] | Includes pre-tax charges of $12 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $5 million were included in cost of services and selling, general and administrative expenses, respectively. | ||||||||||||||||||||
[7] | Includes pre-tax charges of $39 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $28 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax gain on sale of royalty rights of $474 million and the pre-tax loss of $40 million associated with the sale of the Enterix (see Note 6). | ||||||||||||||||||||
[8] | Includes pre-tax charges of $19 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Income from discontinued operations, net of taxes includes a gain on the sale of HemoCue of $14 million (see Note 18). | ||||||||||||||||||||
[9] | Includes pre-tax charges of $45 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $18 million and $27 million were included in cost of services and selling, general and administrative expenses, respectively. |
RESTRUCTURING_ACTIVITIES_Narra
RESTRUCTURING ACTIVITIES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $44 | $76 | $61 |
Cost of Services [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 21 | 27 | 37 |
Selling, General and Administrative Expenses [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 23 | 49 | 24 |
Other Restructuring Initiatives [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Incurred cost | 29 | 12 | |
Invigorate Program [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 44 | 76 | 61 |
Management Layer Reduction Initiative [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Incurred cost | 20 | ||
Voluntary Retirement Program (Invigorate Program) [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Incurred cost | 4 | 45 | |
Support Functions Outsourcing [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Incurred cost | $16 |
RESTRUCTURING_ACTIVITIES_PreTa
RESTRUCTURING ACTIVITIES (Pre-Tax Restructuring charges) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | $44 | $76 | $61 |
Invigorate Program [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Employee separation costs | 31 | 69 | 57 |
Facility-related costs | 12 | 6 | 1 |
Asset impairment charges | 1 | 0 | 1 |
Accelerated vesting of stock-based compensation | 0 | 1 | 2 |
Total restructuring charges | $44 | $76 | $61 |
RESTRUCTURING_ACTIVITIES_Activ
RESTRUCTURING ACTIVITIES (Activities of Restructuring Liabilities) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $36 | $40 |
Restructuring charges | 43 | 75 |
Cash payments | -50 | -82 |
Other / adjustments | 3 | |
Ending balance | 29 | 36 |
Employee Separation Costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 31 | 40 |
Restructuring charges | 31 | 69 |
Cash payments | -44 | -81 |
Other / adjustments | 3 | |
Ending balance | 18 | 31 |
Facility-Related Costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 5 | 0 |
Restructuring charges | 12 | 6 |
Cash payments | -6 | -1 |
Other / adjustments | 0 | |
Ending balance | $11 | $5 |
BUSINESS_ACQUISITIONS_Narrativ
BUSINESS ACQUISITIONS (Narrative) (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 07, 2014 | Apr. 18, 2014 | Apr. 16, 2014 | Jan. 02, 2013 | Jan. 06, 2012 | ||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Business acquisitions, net of cash acquired | $728 | $213 | $51 | |||||||||||||||||||||||
Total consideration | 264 | |||||||||||||||||||||||||
Net revenues | 1,883 | [1],[2] | 1,904 | [1],[3] | 1,902 | [1],[4] | 1,746 | [1],[5] | 1,756 | [1],[6] | 1,788 | [1],[7] | 1,815 | [1],[8] | 1,787 | [1],[9] | 7,435 | [1] | 7,146 | [1] | 7,383 | |||||
Estimated fair value of contingent consideration | 26 | |||||||||||||||||||||||||
To be Paid in 2016 Based on Revenue Targets [Member] | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Estimated fair value of contingent consideration | 13 | 13 | ||||||||||||||||||||||||
Solstas Lab Parnters Group [Member] | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Cash | 572 | |||||||||||||||||||||||||
Business acquisitions, net of cash acquired | 563 | |||||||||||||||||||||||||
Total consideration | 572 | |||||||||||||||||||||||||
Net revenues | 300 | |||||||||||||||||||||||||
Operating costs and expenses | 294 | |||||||||||||||||||||||||
Integration and transaction related costs | 17 | |||||||||||||||||||||||||
Transaction related costs due to sellers | 0 | |||||||||||||||||||||||||
Estimated fair value of contingent consideration | 0 | |||||||||||||||||||||||||
Solstas Lab Parnters Group [Member] | Cost of Services [Member] | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Integration and transaction related costs | 4 | |||||||||||||||||||||||||
Solstas Lab Parnters Group [Member] | Selling, General and Administrative Expenses [Member] | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Integration and transaction related costs | 13 | |||||||||||||||||||||||||
Summit Health, Inc. [Member] | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Cash | 125 | |||||||||||||||||||||||||
Business acquisitions, net of cash acquired | 124 | |||||||||||||||||||||||||
Total consideration | 152 | |||||||||||||||||||||||||
Working capital adjustments | 10 | |||||||||||||||||||||||||
Transaction related costs due to sellers | 5 | |||||||||||||||||||||||||
Contingent consideration arrangements, range of outcomes, value, high | 25 | |||||||||||||||||||||||||
Estimated fair value of contingent consideration | 22 | |||||||||||||||||||||||||
Business acquisition, gain recognized | 9 | |||||||||||||||||||||||||
Steward Health Care Systems, LLC [Member] [Member] | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Cash | 30 | |||||||||||||||||||||||||
Total consideration | 34 | |||||||||||||||||||||||||
Contingent consideration arrangements, range of outcomes, value, high | 5 | |||||||||||||||||||||||||
Estimated fair value of contingent consideration | 4 | |||||||||||||||||||||||||
UMass [Member] | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Total consideration | 50 | |||||||||||||||||||||||||
Percentage of equity interest expected to be divested | 18.90% | |||||||||||||||||||||||||
Vesting period for derivative instrument | 4 months | |||||||||||||||||||||||||
SED Medical Laboratories [Member] | ||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||
Total consideration | $51 | |||||||||||||||||||||||||
[1] | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). | |||||||||||||||||||||||||
[2] | Includes pre-tax charges of $30 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $13 million, $16 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $5 million, principally representing costs incurred related to legal matters, and a pre-tax gain included in other operating (income) expense, net of $9 million associated with a decrease in the fair value of the contingent consideration accrual associated with the Summit Health acquisition. Income from continuing operations includes a discrete benefit of $44 million associated with the favorable resolution of certain tax contingencies. | |||||||||||||||||||||||||
[3] | Includes pre-tax charges of $40 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $14 million, $25 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $8 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||||||||
[4] | Includes pre-tax charges of $27 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $16 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $7 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||||||||
[5] | Includes pre-tax charges of $24 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $12 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $4 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||||||||
[6] | Includes pre-tax charges of $12 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $5 million were included in cost of services and selling, general and administrative expenses, respectively. | |||||||||||||||||||||||||
[7] | Includes pre-tax charges of $39 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $28 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax gain on sale of royalty rights of $474 million and the pre-tax loss of $40 million associated with the sale of the Enterix (see Note 6). | |||||||||||||||||||||||||
[8] | Includes pre-tax charges of $19 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Income from discontinued operations, net of taxes includes a gain on the sale of HemoCue of $14 million (see Note 18). | |||||||||||||||||||||||||
[9] | Includes pre-tax charges of $45 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $18 million and $27 million were included in cost of services and selling, general and administrative expenses, respectively. |
BUSINESS_ACQUISITIONS_Consider
BUSINESS ACQUISITIONS (Consideration Paid) (Details) (USD $) | 12 Months Ended | 0 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Mar. 07, 2014 | Apr. 18, 2014 |
Business Acquisition [Line Items] | |||
Estimated fair value of contingent consideration | $26 | ||
Total consideration | 264 | ||
Solstas Lab Parnters Group [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 572 | ||
Estimated fair value of contingent consideration | 0 | ||
Transaction related costs due to sellers | 0 | ||
Total consideration | 572 | ||
Summit Health, Inc. [Member] | |||
Business Acquisition [Line Items] | |||
Cash | 125 | ||
Estimated fair value of contingent consideration | 22 | ||
Transaction related costs due to sellers | 5 | ||
Total consideration | $152 |
BUSINESS_ACQUISITIONS_Purchase
BUSINESS ACQUISITIONS (Purchase Price Allocation) (Details) (USD $) | 0 Months Ended | ||||
In Millions, unless otherwise specified | Mar. 07, 2014 | Apr. 18, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Business Acquisition [Line Items] | |||||
Goodwill | $6,032 | $5,649 | $5,536 | ||
Finite-lived intangibles | 270 | ||||
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 | 12 | ||||
Property, plant and equipment, net | 49 | ||||
Goodwill | 270 | ||||
Total intangible assets | 210 | ||||
Non-current deferred income taxes | 42 | ||||
Total assets acquired | 647 | ||||
Current liabilities | 63 | ||||
Non-current deferred income taxes | 4 | ||||
Other non-current liabilities | 8 | ||||
Total liabilities assumed | 75 | ||||
Net assets acquired | 572 | ||||
Solstas Lab Parnters Group [Member] | Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 203 | ||||
Weighted average useful life | 20 years | ||||
Solstas Lab Parnters Group [Member] | Trade Names [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 7 | ||||
Weighted average useful life | 2 years | ||||
Solstas Lab Parnters Group [Member] | Computer Software, Intangible Asset [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 0 | ||||
Summit Health, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 1 | ||||
Accounts receivable, net | 9 | ||||
Current deferred income taxes | 0 | ||||
Other current assets | 16 | ||||
Property, plant and equipment, net | 6 | ||||
Goodwill | 92 | ||||
Total intangible assets | 38 | ||||
Non-current deferred income taxes | 0 | ||||
Total assets acquired | 162 | ||||
Current liabilities | 10 | ||||
Non-current deferred income taxes | 0 | ||||
Other non-current liabilities | 0 | ||||
Total liabilities assumed | 10 | ||||
Net assets acquired | 152 | ||||
Summit Health, Inc. [Member] | Customer Relationships [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 33 | ||||
Weighted average useful life | 15 years | ||||
Summit Health, Inc. [Member] | Trade Names [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | 2 | ||||
Weighted average useful life | 1 year | ||||
Summit Health, Inc. [Member] | Computer Software, Intangible Asset [Member] | |||||
Business Acquisition [Line Items] | |||||
Finite-lived intangibles | $3 | ||||
Weighted average useful life | 4 years |
BUSINESS_ACQUISITIONS_Pro_Form
BUSINESS ACQUISITIONS (Pro Forma) (Details) (USD $) | 12 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Business Combinations [Abstract] | ||
Pro forma net revenues | $7,520 | $7,622 |
Pro forma income from continuing operations | $585 | $855 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: | ||
Pro forma income from continuing operations | $3.79 | $5.40 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: | ||
Pro forma income from continuing operations | $3.77 | $5.36 |
DISPOSITIONS_Details
DISPOSITIONS (Details) (USD $) | 0 Months Ended | 12 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Jul. 18, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Apr. 30, 2013 | Jun. 30, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Gain on sale of royalty rights | ($474) | $0 | $474 | $0 | ||||
Enterix [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Loss on sale of businesses, net | 40 | 40 | ||||||
HemoCue [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
After tax gain on disposal of discontinued operations | 14 | 14 | 14 | |||||
Royalty Agreement Terms [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Gain on sale of royalty rights | 474 | |||||||
Royalty Agreement Terms [Member] | Ibrutinib [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Proceeds from sale of intangible assets | $485 |
FAIR_VALUE_MEASUREMENTS_Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
Apr. 18, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 02, 2013 | Apr. 16, 2014 | |
Business Acquisition [Line Items] | |||||
Fair value of debt | 4,200,000,000 | $3,500,000,000 | |||
Fair value In excess of carrying value of debt | 396,000,000 | 184,000,000 | |||
Contingent consideration | 26,000,000 | ||||
To be Paid in 2016 Based on Revenue Targets [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration | 13,000,000 | ||||
Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Fair value inputs, probability of occurrence | 5.00% | ||||
Discount rate | 1.50% | ||||
Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Fair value inputs, probability of occurrence | 95.00% | ||||
Discount rate | 2.80% | ||||
UMass [Member] | |||||
Business Acquisition [Line Items] | |||||
Percentage of equity interest expected to be divested | 18.90% | ||||
Vesting period for derivative instrument | 4 months | ||||
Summit Health, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration | 22,000,000 | ||||
Contingent consideration arrangements, range of outcomes, value, high | 25,000,000 | ||||
Steward Health Care Systems, LLC [Member] [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration | 4,000,000 | ||||
Contingent consideration arrangements, range of outcomes, value, high | $5,000,000 |
FAIR_VALUE_MEASUREMENTS_Recogn
FAIR VALUE MEASUREMENTS (Recognized Assets and Liabilities at Fair Value) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash surrender value of life insurance policies | $30 | $29 |
Available-for-sale equity securities | 9 | 0 |
Recurring Basis [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 49 | 50 |
Cash surrender value of life insurance policies | 30 | 29 |
Available-for-sale equity securities | 9 | |
Total assets | 106 | 85 |
Deferred compensation liabilities | 85 | 84 |
Contingent consideration | 17 | |
Total liabilities | 135 | 126 |
Recurring Basis [Member] | 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 |
Available-for-sale equity securities | 9 | |
Total assets | 58 | 50 |
Contingent consideration | 0 | |
Recurring Basis [Member] | Significant Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash surrender value of life insurance policies | 30 | 29 |
Total assets | 47 | 31 |
Deferred compensation liabilities | 85 | 84 |
Contingent consideration | 0 | |
Total liabilities | 113 | 118 |
Recurring Basis [Member] | Significant Unobservable Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale equity securities | 0 | |
Total assets | 1 | 4 |
Contingent consideration | 17 | |
Total liabilities | 22 | 8 |
Recurring Basis [Member] | Put Option [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 1 | 4 |
Recurring Basis [Member] | Put Option [Member] | Significant Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 0 | 0 |
Recurring Basis [Member] | Put Option [Member] | Significant Unobservable Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 1 | 4 |
Recurring Basis [Member] | Forward Contracts [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 2 | |
Derivative instruments, liabilities | 15 | |
Recurring Basis [Member] | 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 | 15 | |
Recurring Basis [Member] | Interest Rate Swaps [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 17 | |
Derivative instruments, liabilities | 13 | 34 |
Recurring Basis [Member] | Interest Rate Swaps [Member] | Significant Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative asset | 17 | |
Derivative instruments, liabilities | 13 | 34 |
Recurring Basis [Member] | Call Option [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, liabilities | 5 | 8 |
Recurring Basis [Member] | Call Option [Member] | Significant Other Observable Inputs, Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, liabilities | 0 | |
Recurring Basis [Member] | Call Option [Member] | Significant Unobservable Inputs, Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instruments, liabilities | $5 | $8 |
FAIR_VALUE_MEASUREMENTS_Reconc
FAIR VALUE MEASUREMENTS (Reconciliation of Beginning and Ending Balances of Assets Unobservable Inputs) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $4 | $1 |
Purchases, additions and issuances | 8 | |
Included in earnings | -3 | -4 |
Included in other comprehensive income (loss) | -1 | |
Ending Balance | 1 | 4 |
Available-for-sale Equity Securities [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | 1 |
Purchases, additions and issuances | 0 | |
Included in earnings | 0 | 0 |
Included in other comprehensive income (loss) | -1 | |
Ending Balance | 0 | 0 |
Put Option Derivative Assets [Member] | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 4 | 0 |
Purchases, additions and issuances | 8 | |
Included in earnings | -3 | -4 |
Included in other comprehensive income (loss) | 0 | |
Ending Balance | $1 | $4 |
FAIR_VALUE_MEASUREMENTS_Reconc1
FAIR VALUE MEASUREMENTS (Reconciliation of Beginning and Ending Balances of Liabilities Unobservable Inputs) (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $8 | $0 |
Purchases, additions and issuances | 26 | 11 |
Included in earnings | -12 | -3 |
Ending Balance | 22 | 8 |
Call Option Derivative Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 8 | 0 |
Purchases, additions and issuances | 0 | 11 |
Included in earnings | -3 | -3 |
Ending Balance | 5 | 8 |
Contingent Consideration [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | 0 | 0 |
Purchases, additions and issuances | 26 | 0 |
Included in earnings | -9 | 0 |
Ending Balance | $17 | $0 |
TAXES_ON_INCOME_Details
TAXES ON INCOME (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Contingency [Line Items] | |||
Income (loss) from continuing operations - domestic | $836 | $1,300 | $1,100 |
Income (loss) from continuing operations - foreign | 13 | 19 | 18 |
Current federal income tax expense | 204 | 417 | 332 |
Current state and local income tax expense | 34 | 59 | 61 |
Current foreign income tax expense | 3 | 4 | 3 |
Defered federal income tax expense (benefit) | 28 | 27 | 13 |
Deferred state and local income tax expense (benefit) | -6 | -6 | -6 |
Deferred foreign income tax expense (benefit) | -1 | -1 | -1 |
Total | 262 | 500 | 402 |
Tax provision at statutory rate | 35.00% | 35.00% | 35.00% |
State and local income taxes, net of federal benefit | 3.10% | 2.80% | 3.40% |
Impact of foreign operations | -0.20% | -0.30% | -0.30% |
Tax credits | -0.80% | -0.40% | -0.20% |
Adjustments to unrecognized tax positions (the net benefit mainly results from favorable resolution of certain tax contingencies) | -4.90% | 1.40% | 1.20% |
Non-deductible expenses, primarily meals and entertainment expenses | 0.40% | 0.30% | 0.30% |
Impact of noncontrolling interests | -1.60% | -1.00% | -1.30% |
Other, net | -0.10% | -0.70% | -0.50% |
Effective tax rate | 30.90% | 37.10% | 37.60% |
Accounts receivable reserves current DTA | 91 | 85 | |
Liabilities not currently deductible current DTA | 78 | 63 | |
Total current deferred tax assets | 169 | 148 | |
Liabilities not currently deductible non-current DTA | 138 | 144 | |
Stock-based compensation | 42 | 43 | |
Capitalized R&D expense | 3 | 6 | |
Net operating loss carryfowards, net of valuation allowance | 165 | 114 | |
Non-current deferred tax liability - depreciation and amortization | -519 | -475 | |
Total non-current deferred tax liabilities, net | -171 | -168 | |
Total non-current deferred tax assets | 33 | 24 | |
Total non-current deferred tax liabilities | 204 | 192 | |
Deferred Tax Assets, Operating Loss Carryforwards | 242 | 140 | |
Deferred tax assets, valuation allowance | 60 | 34 | |
Income taxes payable | 110 | 157 | |
Prepaid taxes | 44 | ||
Unrecognized tax benefits, beginning balance | 168 | 199 | 195 |
Additions for tax positions of current year | 17 | 11 | 12 |
Additions for tax positions of prior years | 1 | 12 | 10 |
Reductions for changes in judgment | -56 | -23 | -2 |
Reductions for expirations of statutes of limitations | -6 | -2 | -6 |
Reductions for settlements | -2 | -29 | -10 |
Unrecognized tax benefits, ending balance | 122 | 168 | 199 |
Unrecognized tax benefits that would impact effective tax rate | 98 | ||
Significant change in unrecognized tax benefits is reasonably possible, estimated range of change, upper bound | 58 | ||
Unrecognized tax Benefits, interest on income taxes expense | -1 | 3 | 3 |
Unrecognized tax benefits, interest on income taxes accrued | 12 | 13 | |
Domestic Country [Member] | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards - foreign | 326 | ||
Net operating loss carryforwards - expiration dates | 31-Dec-33 | ||
Foreign Country [Member] | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards - foreign | 44 | ||
Net operating loss carryforwards - expiration dates | 31-Dec-22 | ||
Internal Revenue Service (IRS) [Member] | Minimum [Member] | |||
Income Tax Contingency [Line Items] | |||
Income Tax Examination, Year under Examination | 2009 | ||
Tax years subject to examination | 2012 | ||
Internal Revenue Service (IRS) [Member] | Maximum [Member] | |||
Income Tax Contingency [Line Items] | |||
Tax years subject to examination | 2014 | ||
State and Local Jurisdiction [Member] | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards - foreign | $1,400 | ||
State and Local Jurisdiction [Member] | Minimum [Member] | |||
Income Tax Contingency [Line Items] | |||
Tax years subject to examination | 2005 | ||
State and Local Jurisdiction [Member] | Maximum [Member] | |||
Income Tax Contingency [Line Items] | |||
Tax years subject to examination | 2014 |
SUPPLEMENTAL_CASH_FLOW_OTHER_D2
SUPPLEMENTAL CASH FLOW & OTHER DATA (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Supplemental Cash Flow and Other Data [Line Items] | |||
Depreciation expense | $220 | $204 | $207 |
Amortization expense | 94 | 79 | 80 |
Interest expense, net | -164 | -159 | -165 |
Interest paid | 170 | 167 | 163 |
Income taxes paid | 327 | 568 | 305 |
Assets acquired under capital leases | 12 | 13 | 6 |
Account payable associated with capital expenditures | 26 | 28 | 0 |
Dividend payable | 48 | 43 | 48 |
Fair value of assets acquired | 853 | 280 | 51 |
Fair value of liabilities assumed | 85 | 16 | |
Fair value of net assets acquired | 768 | 264 | 51 |
Merger consideration paid (payable) | -30 | -50 | |
Cash paid for business acquisitions | 738 | 214 | 51 |
Less: cash acquired | 10 | 1 | |
Business acquisitions, net of cash acquired | 728 | 213 | 51 |
Continuing Operations [Member] | |||
Supplemental Cash Flow and Other Data [Line Items] | |||
Depreciation expense | 220 | 203 | 204 |
Interest expense | -167 | -162 | -168 |
Interest income | 3 | 3 | 3 |
Interest expense, net | ($164) | ($159) | ($165) |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $3,126 | $2,806 |
Less: accumulated depreciation and amortization | -2,193 | -2,001 |
Property, plant and equipment, net | 933 | 805 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 28 | 30 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 367 | 365 |
Laboratory Equipment, Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,386 | 1,248 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 538 | 452 |
Computer Software Developed or Obtained for Internal Use [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 675 | 581 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $132 | $130 |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Goodwill, balance at beginning of year | $5,649 | $5,536 |
Goodwill acquired during the year | 383 | 150 |
Write-off associated with sale of business during the year | 0 | -37 |
Goodwill, balance at end of year | 6,032 | 5,649 |
Intangible assets, gross excluding goodwill | 1,487 | 1,218 |
Accumulated amortization, intangible assets | -416 | -322 |
Total intangible assets, net | 1,071 | 896 |
Future amortization expense, 2015 | 85 | |
Future amortization expense, 2016 | 74 | |
Future amortization expense, 2017 | 71 | |
Future amortization expense, 2018 | 64 | |
Future amortization expense, 2019 | 62 | |
Future amortization expense, thereafter | 470 | |
Future amortization expense, total | 826 | |
Intangible Assets Not Subject to Amortization - Tradenames [Member] | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, gross excluding goodwill | 244 | 244 |
Total intangible assets, net | 244 | 244 |
Intangible Assets Not Subject to Amortization - Other [Member] | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, gross excluding goodwill | 1 | 1 |
Total intangible assets, net | 1 | 1 |
Customer Relationships [Member] | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 18 years | |
Intangible assets, gross excluding goodwill | 929 | 670 |
Accumulated amortization, intangible assets | -259 | -210 |
Total intangible assets, net | 670 | 460 |
Non-compete Agreements [Member] | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 4 years | |
Intangible assets, gross excluding goodwill | 43 | 43 |
Accumulated amortization, intangible assets | -37 | -27 |
Total intangible assets, net | 6 | 16 |
Unpatented Technology [Member] | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 14 years | |
Intangible assets, gross excluding goodwill | 118 | 119 |
Accumulated amortization, intangible assets | -38 | -28 |
Total intangible assets, net | 80 | 91 |
Other Intangible Assets, Subject To Amortization [Member] | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 8 years | |
Intangible assets, gross excluding goodwill | 152 | 141 |
Accumulated amortization, intangible assets | -82 | -57 |
Total intangible assets, net | 70 | 84 |
Total Amortizing Intangible Assets [Member] | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 16 years | |
Intangible assets, gross excluding goodwill | 1,242 | 973 |
Accumulated amortization, intangible assets | -416 | -322 |
Total intangible assets, net | 826 | 651 |
Enterix [Member] | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Write-off associated with sale of business during the year | -37 | |
Intangible assets, gross excluding goodwill | 14 | |
Accumulated amortization, intangible assets | -8 | |
Total intangible assets, net | $6 |
GOODWILL_AND_INTANGIBLE_ASSETS3
GOODWILL AND INTANGIBLE ASSETS (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets, net | $1,071 | $896 | |
Amortization of intangible assets | 94 | 79 | 75 |
Goodwill acquired during the year | 383 | 150 | |
Finite-lived intangibles | 270 | ||
Goodwill impairment and write-off associated with sale of business | 0 | 37 | |
Intangible assets, gross excluding goodwill | 1,487 | 1,218 | |
Accumulated amortization, intangible assets | 416 | 322 | |
Solstas, Summit Health and Steward [Member] | |||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill deductible for tax purposes | 103 | ||
UMass, Dignity and ATN Combined [Member] | |||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill deductible for tax purposes | 135 | ||
SED Medical Laboratories [Member] | |||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Finite-lived intangibles | 108 | ||
Enterix [Member] | |||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets, net | 6 | ||
Goodwill impairment and write-off associated with sale of business | 37 | ||
Intangible assets, gross excluding goodwill | 14 | ||
Accumulated amortization, intangible assets | $8 |
ACCOUNTS_PAYABLE_AND_ACCRUED_E2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Schedule of Accounts Payable and Accrued Expenses) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | |||
Accounts Payable and Accrued Liabilities [Abstract] | |||
Trade accounts payable | $257 | $258 | |
Accrued wages and benefits, including incentive compensation | 364 | 283 | |
Income taxes payable | 63 | 7 | |
Accrued interest | 67 | 61 | |
Accrued insurance | 59 | 30 | |
Merger consideration payable | 56 | 1 | |
Dividend payable | 48 | 43 | 48 |
Accrued expenses | 277 | 237 | |
Accounts payable and accrued expenses | $1,191 | $920 |
DEBT_LongTerm_Debt_Details
DEBT (Long-Term Debt) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Debt Instrument [Line Items] | |||
Total long-term debt | $3,762 | $3,332 | |
Less: current portion of long-term debt | 518 | 212 | |
Total long-term debt, net of current portion | 3,244 | 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 | 304 | 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% | 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 | 524 | 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 | 549 | 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 | 311 | 0 | |
Debt instrument, interest rate | 4.25% | 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 | $39 | $37 |
DEBT_Secured_Receivables_Credi
DEBT (Secured Receivables Credit Facility) (Narrative) (Details) (Secured Receivables Credit Facility [Member], USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Secured Receivables Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility capacity | $525 | |
Expiration date | 5-Dec-16 | |
Credit facility borrowing rate | 0.86% | 0.86% |
DEBT_Senior_Unsecured_Revolvin
DEBT (Senior Unsecured Revolving Credit Facility) (Narrative) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 0.75% | |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate | 1.63% | |
Letter of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility capacity | 150,000,000 | |
Letters of credit outstanding, amount | 1,000,000 | |
Unsecured Debt [Member] | Senior Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility capacity | 750,000,000 | |
Line of credit facility, amount outstanding | 0 | 0 |
Unsecured Debt [Member] | Senior Revolving Credit Facility [Member] | LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of LIBOR | 1.13% | 1.13% |
DEBT_Senior_Notes_Offering_Det
DEBT (Senior Notes Offering) (Details) (USD $) | 12 Months Ended | 1 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Debt Instrument [Line Items] | |||||
Cash and cash equivalents | 192 | $187 | $296 | $165 | |
2.70% Senior Notes due April 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 2.70% | 2.70% | |||
Debt instrument, maturity date | 1-Apr-19 | ||||
4.25% Senior Notes due April 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 4.25% | 4.25% | |||
Debt instrument, maturity date | 1-Apr-24 | ||||
Floating Rate Senior Notes due 2014 [Member] | March 2011 Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, maturity date | 24-Mar-14 | ||||
Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount of debt | 600 | ||||
Debt instrument, original discount | 1 | ||||
Debt issuance cost | 5 | ||||
Senior Notes [Member] | 2.70% Senior Notes due April 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount of debt | 300 | ||||
Senior Notes [Member] | 4.25% Senior Notes due April 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Face amount of debt | $300 |
DEBT_Maturities_of_LongTerm_De
DEBT (Maturities of Long-Term Debt) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Debt Instruments [Abstract] | ||
2016 | $309 | |
2017 | 381 | |
2018 | 4 | |
2019 | 301 | |
2020 | 500 | |
Thereafter | 1,726 | |
Total maturities of debt | 3,221 | |
Unamortized discount | -20 | |
Debt Instrument, fair value basis adjustment attributable to hedged debt | 43 | |
Total long-term debt, net of current portion | $3,244 | $3,120 |
FINANCIAL_INSTRUMENTS_Details
FINANCIAL INSTRUMENTS (Details) (USD $) | 12 Months Ended | |||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Jul. 24, 2012 | Mar. 31, 2014 |
Cash Flow Hedging [Member] | ||||
Derivative [Line Items] | ||||
Accumulated net loss from designated or qualifying cash flow hedges | $15 | $5 | ||
Net amount of deferred gains and losses on cash flow hedges that is expected to be reclassified within the next 12 months | 1 | |||
Interest Rate Swaps [Member] | ||||
Derivative [Line Items] | ||||
Derivative asset designated as hedging instrument fair value on termination | 72 | |||
Amount to be amortized as a reduction of interest expense | 65 | |||
Treasury Lock [Member] | Cash Flow Hedging [Member] | ||||
Derivative [Line Items] | ||||
Derivative, notional amount | 175 | |||
Interest Rate Swaps [Member] | Forward Contracts [Member] | ||||
Derivative [Line Items] | ||||
Maximum Length of Time Hedged in Interest Rate Cash Flow Hedge | 10 years | |||
Derivative, notional amount | $150 | $100 | ||
Interest Rate Swaps [Member] | Forward Contracts [Member] | Minimum [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Term of Contract | 21 months | |||
Derivative, Fixed Interest Rate | 3.57% | |||
Interest Rate Swaps [Member] | Forward Contracts [Member] | Maximum [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Term of Contract | 24 months | |||
Derivative, Fixed Interest Rate | 3.79% |
FINANCIAL_INSTRUMENTS_Outstand
FINANCIAL INSTRUMENTS (Outstanding Notional Amount) (Details) (Interest Rate Swaps [Member], Forward Contracts [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Interest Rate Swaps [Member] | Forward Contracts [Member] | ||
Derivative [Line Items] | ||
Notional Amount | $150 | $100 |
FINANCIAL_INSTRUMENTS_Summary_
FINANCIAL INSTRUMENTS (Summary of Notional Amounts) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Minimum [Member] | |||
Derivative [Line Items] | |||
Debt instrument, interest rate | 0.75% | ||
Maximum [Member] | |||
Derivative [Line Items] | |||
Debt instrument, interest rate | 1.63% | ||
3.20% Senior Notes due April 2016 [Member] | |||
Derivative [Line Items] | |||
Debt instrument, interest rate | 3.20% | ||
Debt instrument, maturity date | 1-Apr-16 | ||
3.20% Senior Notes due April 2016 [Member] | Six-Month LIBOR [Member] | |||
Derivative [Line Items] | |||
Floating Rate | 2.30% | ||
4.75% Senior Notes due January 2020 [Member] | |||
Derivative [Line Items] | |||
Debt instrument, interest rate | 4.75% | ||
Debt instrument, maturity date | 30-Jan-20 | ||
4.75% Senior Notes due January 2020 [Member] | One-Month LIBOR [Member] | |||
Derivative [Line Items] | |||
Floating Rate | 3.60% | ||
4.70% Senior Notes due April 2021 [Member] | |||
Derivative [Line Items] | |||
Debt instrument, interest rate | 4.70% | ||
Debt instrument, maturity date | 1-Apr-21 | ||
4.70% Senior Notes due April 2021 [Member] | One-Month LIBOR [Member] | Minimum [Member] | |||
Derivative [Line Items] | |||
Floating Rate | 2.45% | ||
4.70% Senior Notes due April 2021 [Member] | One-Month LIBOR [Member] | Maximum [Member] | |||
Derivative [Line Items] | |||
Floating Rate | 3.39% | ||
4.25% Senior Notes due April 2024 [Member] | |||
Derivative [Line Items] | |||
Debt instrument, interest rate | 4.25% | 4.25% | |
Debt instrument, maturity date | 1-Apr-24 | ||
4.25% Senior Notes due April 2024 [Member] | One-Month LIBOR [Member] | Minimum [Member] | |||
Derivative [Line Items] | |||
Floating Rate | 1.54% | ||
4.25% Senior Notes due April 2024 [Member] | One-Month LIBOR [Member] | Maximum [Member] | |||
Derivative [Line Items] | |||
Floating Rate | 1.59% | ||
Fair Value Hedging [Member] | |||
Derivative [Line Items] | |||
Notional Amount | 1,200 | $950 | |
Fair Value Hedging [Member] | 3.20% Senior Notes due April 2016 [Member] | |||
Derivative [Line Items] | |||
Notional Amount | 200 | 200 | |
Fair Value Hedging [Member] | 4.75% Senior Notes due January 2020 [Member] | |||
Derivative [Line Items] | |||
Notional Amount | 350 | 350 | |
Fair Value Hedging [Member] | 4.70% Senior Notes due April 2021 [Member] | |||
Derivative [Line Items] | |||
Notional Amount | 400 | 400 | |
Fair Value Hedging [Member] | 4.25% Senior Notes due April 2024 [Member] | |||
Derivative [Line Items] | |||
Notional Amount | 250 | $0 |
FINANCIAL_INSTRUMENTS_Fair_Val
FINANCIAL INSTRUMENTS (Fair Value of Derivatives) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Derivatives, Fair Value [Line Items] | ||
Total Net Derivatives Liabilities | ($15) | ($36) |
Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives: | 17 | 2 |
Liability Derivatives: | 28 | 34 |
Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives: | 17 | 0 |
Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives: | 13 | 34 |
Designated as Hedging Instrument [Member] | Forward Contracts [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives: | 0 | 2 |
Designated as Hedging Instrument [Member] | Forward Contracts [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives: | 15 | 0 |
Not Designated as Hedging Instrument [Member] | Put Option [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives: | 4 | |
Not Designated as Hedging Instrument [Member] | Put Option [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives: | 1 | |
Not Designated as Hedging Instrument [Member] | Call Option [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives: | 8 | |
Not Designated as Hedging Instrument [Member] | Call Option [Member] | Accounts Payable and Accrued Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives: | $5 |
PREFERRED_STOCK_AND_COMMON_STO2
PREFERRED STOCK AND COMMON STOCKHOLDERS' EQUITY (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | |||||||||||||
Aug. 31, 2013 | Nov. 30, 2012 | Jan. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 29, 2015 | Sep. 30, 2013 | Jun. 30, 2013 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2013 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | 4-May-06 | 3-May-06 | |
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||||||
Preferred stock, par value | $1 | |||||||||||||||||
Preferred stock, shares outstanding | 0 | |||||||||||||||||
Common stock, par value | $0.01 | $0.01 | $0.01 | |||||||||||||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | 600,000,000 | 300,000,000 | ||||||||||||||
Dividend program | $0.33 | $0.30 | $0.30 | $0.30 | $0.30 | $0.33 | $0.33 | $0.33 | $0.30 | $0.17 | $0.17 | $0.17 | ||||||
Original dividend payable per share | $0.17 | |||||||||||||||||
Treasury stock value acquired cost method | $132,000,000 | $1,037,000,000 | $200,000,000 | |||||||||||||||
Stock repurchase program, remaining authorized repurchase amount | 1,300,000,000 | 1,100,000,000 | 696,000,000 | |||||||||||||||
Reissuance of shares for employee benefit plan | 2,000,000 | 3,000,000 | 4,000,000 | |||||||||||||||
Treasury stock aquired repurchase program | 1,000,000,000 | 1,000,000,000 | ||||||||||||||||
Maximum [Member] | ||||||||||||||||||
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||||||
Preferred stock, shares authorized | 10,000,000 | |||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||||||
Dividend program | $0.38 | |||||||||||||||||
Original dividend payable per share | $0.33 | |||||||||||||||||
Accelerated Share Repurchase Program [Member] | ||||||||||||||||||
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||||||
Treasury stock acquired accelerated share repurchase total cost | 350,000,000 | 450,000,000 | ||||||||||||||||
Treasury Stock Acquired Accelerated Share Repurchase Final Shares | 5,800,000 | 7,600,000 | ||||||||||||||||
Treasury stock acquired accelerated share repurchase, final purchase price, per share | $60.73 | $59.46 | ||||||||||||||||
Share Repurchases Open Market [Member] | ||||||||||||||||||
Schedule of Shareholders' Equity [Line Items] | ||||||||||||||||||
Treasury stock acquired average cost per share | $59.49 | $57.63 | $58.31 | |||||||||||||||
Treasury stock value acquired cost method | $132,000,000 | $237,000,000 | $200,000,000 | |||||||||||||||
Purchases of treasury stock, shares | 2,200,000 | 4,100,000 | 3,400,000 |
PREFERRED_STOCK_AND_COMMON_STO3
PREFERRED STOCK AND COMMON STOCKHOLDERS' EQUITY (Components of Accumulated Other Comprehensive (Loss) Income (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Shareholders' Equity [Line Items] | |||
Balance | ($8) | ||
Net current period other comprehensive (loss) income | -19 | -22 | 22 |
Balance | -27 | -8 | |
Foreign Currency Translation Adjustment [Member] | |||
Schedule of Shareholders' Equity [Line Items] | |||
Balance | -2 | 25 | 1 |
Other comprehensive (loss) income before reclassifications | -7 | 2 | 24 |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | -29 | 0 |
Net current period other comprehensive (loss) income | -7 | -27 | 24 |
Balance | -9 | -2 | 25 |
Market Value Adjustment [Member] | |||
Schedule of Shareholders' Equity [Line Items] | |||
Balance | 0 | 1 | 1 |
Other comprehensive (loss) income before reclassifications | -1 | -1 | 0 |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 | 0 |
Net current period other comprehensive (loss) income | -1 | -1 | 0 |
Balance | -1 | 0 | 1 |
Net Deferred Loss on Cash Flow Hedges [Member] | |||
Schedule of Shareholders' Equity [Line Items] | |||
Balance | -5 | -7 | -8 |
Other comprehensive (loss) income before reclassifications | -11 | 1 | 0 |
Amounts reclassified from accumulated other comprehensive (loss) income | 1 | 1 | 1 |
Net current period other comprehensive (loss) income | -10 | 2 | 1 |
Balance | -15 | -5 | -7 |
Other [Member] | |||
Schedule of Shareholders' Equity [Line Items] | |||
Balance | -1 | -5 | -2 |
Other comprehensive (loss) income before reclassifications | -1 | 1 | -3 |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 3 | 0 |
Net current period other comprehensive (loss) income | -1 | 4 | -3 |
Balance | -2 | -1 | -5 |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Schedule of Shareholders' Equity [Line Items] | |||
Balance | -8 | 14 | -8 |
Other comprehensive (loss) income before reclassifications | -20 | 3 | 21 |
Amounts reclassified from accumulated other comprehensive (loss) income | 1 | -25 | 1 |
Net current period other comprehensive (loss) income | -19 | -22 | 22 |
Balance | ($27) | ($8) | $14 |
STOCK_OWNERSHIP_AND_COMPENSATI2
STOCK OWNERSHIP AND COMPENSATION PLANS (Employee and Non-employee Directors Stock Ownership Programs) (Details) | 12 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2009 | 31-May-12 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options granted | 2,500,000 | ||||
Employee Long Term Incentive Plan Eltip [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Employee and non-employee directors stock ownership programs | In 2005, the Company established the ELTIP to replace the Company's prior Employee Equity Participation Programs established in 1999 (the “1999 EEPPâ€). At the Company's annual shareholders' meeting in May 2012, the shareholders approved certain amendments to the ELTIP including: (i) increasing the number of shares available for award under the ELTIP by approximately 7 million shares; (ii) limiting the number of shares subject to stock options or SARs that may be awarded to an individual during any fiscal year to 2,000,000; (iii) limiting the number of shares subject to stock awards that may be awarded to an individual during any fiscal year to 1,000,000; (iv) prohibiting the exchange of stock options or SARs for cash; and (v) extending the term of the ELTIP until the date of the 2022 annual shareholders' meeting. The ELTIP provides for three types of awards: (a) stock options, (b) stock appreciation rights and (c) stock awards. The ELTIP provides for the grant to eligible employees of either non-qualified or incentive stock options, or both, to purchase shares of Company common stock at an exercise price no less than the fair market value of the Company's common stock on the date of grant. The stock options are subject to forfeiture if employment terminates prior to the end of the vesting period prescribed by the Board of Directors. Grants of stock appreciation rights allow eligible employees to receive a payment based on the appreciation of Company common stock in cash, shares of Company common stock or a combination thereof. The stock appreciation rights are granted at an exercise price no less than the fair market value of the Company's common stock on the date of grant. Stock options and stock appreciation rights granted under the ELTIP expire on the date designated by the Board of Directors but in no event more than ten years from date of grant. No stock appreciation rights have been granted under the ELTIP or the 1999 EEPP. The ELTIP allows eligible employees to receive awards of shares, or the right to receive shares, of Company common stock, the equivalent value in cash or a combination thereof. These shares are generally earned on achievement of financial performance goals and are subject to forfeiture if employment terminates prior to the end of the vesting period prescribed by the Board of Directors. For performance share unit awards, the actual amount of performance share awards earned is based on the achievement of the performance goals specified in the awards. Key executive, managerial and technical employees are eligible to participate in the ELTIP. The provisions of the 1999 EEPP were similar to those outlined above for the ELTIP. Certain options granted under the 1999 EEPP remain outstanding. The maximum number of shares of Company common stock that may be optioned or granted under the ELTIP is approximately 60 million shares. | ||||
Number of shares available for award | 60,000,000 | ||||
Contractual life of stock options and other awards under the shared-based compensation plans | 10 years | ||||
Restated Director Long-Term Incentive Plan (DLTIP) Amendment [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Contractual life of stock options and other awards under the shared-based compensation plans | 10 years | ||||
Employee Long-Term Incentive Plan (ELTIP) Amendment [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Increase in Number of Shares Authorized | 7,000,000 | ||||
Maximum number of shares subject to stock options or SARS | 2,000,000 | ||||
Maximum number of shares subject to stock awards by individual | 1,000,000 | ||||
Restated Director Long-Term Incentive Plan (DLTIP) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Employee and non-employee directors stock ownership programs | In 2005, the Company established the DLTIP, to replace the Company's prior plan established in 1998. At the Company's annual shareholders' meeting in May 2009, the shareholders approved certain amendments to the DLTIP including: (i) increasing the number of shares available for award under the DLTIP by 0.4 million shares; (ii) increasing the maximum term that the Board of Directors may establish for awards of stock options from seven to ten years, beginning with awards in 2009; and (iii) extending the term of the DLTIP until the date of the 2019 annual shareholders' meeting. The DLTIP provides for the grant to non-employee directors of non-qualified stock options to purchase shares of Company common stock at an exercise price no less than the fair market value of the Company's common stock on the date of grant. The DLTIP also permits awards of restricted stock and restricted stock units to non-employee directors. Stock options granted under the DLTIP expire on the date designated by the Board of Directors but in no event more than ten years from date of grant, and generally become exercisable in three equal annual installments beginning on the first anniversary date of the grant of the option regardless of whether the optionee remains a director of the Company. The maximum number of shares that may be issued under the DLTIP is 2.4 million shares. For the years ended December 31, 2013, 2012 and 2011, grants under the DLTIP totaled 75 thousand shares, 72 thousand shares and 60 thousand shares, respectively. | ||||
Number of shares available for award | 2,400,000 | ||||
Contractual life of stock options and other awards under the shared-based compensation plans | 10 years | 7 years | |||
Graded vesting period of the share-based award | 3 years | ||||
Options granted | 32,000 | 75,000 | 72,000 |
STOCK_OWNERSHIP_AND_COMPENSATI3
STOCK OWNERSHIP AND COMPENSATION PLANS (Weighted Average Assumptions Used in Valuing Options Granted) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation arrangement by share-based payment award, fair value assumptions, method used | The fair value of each stock option award granted was estimated on the date of grant using a lattice-based option-valuation model. The expected volatility under the lattice-based option-valuation model was based on the current and the historical implied volatilities from traded options of the Company's common stock. The dividend yield was based on the approved annual dividend rate in effect and current market price of the underlying common stock at the time of grant. The risk-free interest rate of each stock option granted was based on the U.S. Treasury yield curve in effect at the time of grant for bonds with maturities ranging from 1 month to 10 years. The expected holding period of the options granted was estimated using the historical exercise behavior of employees. The weighted average assumptions used in valuing options granted in the periods presented are: | ||
Bond maturity range, lower range limit | 1 month | ||
Bond maturity range, upper range limit | 10 years | ||
Weighted average fair value of options at grant date | $10.99 | $12.64 | $15.87 |
Expected volatility | 25.10% | 25.80% | 27.00% |
Dividend yield | 2.10% | 1.40% | 0.90% |
Risk-free interest rate minimum | 1.60% | 1.10% | 1.30% |
Risk-free interest rate maximum | 2.00% | 1.30% | 1.50% |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected holding period, in years | 5 years 6 months | 5 years 6 months | 6 years 8 months 12 days |
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected holding period, in years | 6 years 7 months 6 days | 6 years 8 months 12 days | 7 years 6 months |
STOCK_OWNERSHIP_AND_COMPENSATI4
STOCK OWNERSHIP AND COMPENSATION PLANS (Transactions Under Stock Option Plans) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding, beginning of year | 6,300,000 | ||
Options outstanding, beginning of year weighted average exercise price | $54.20 | ||
Options granted | 2,500,000 | ||
Options, granted weighted average exercise price | $52.39 | ||
Exercise of stock options, shares | -1,500,000 | ||
Options exercised weighted average exercise price | $51.65 | ||
Options forfeited and cancelled | -700,000 | ||
Options forfeited and cancelled weighted average exercise price | $50.47 | ||
Options outstanding, end of year weighted average remaining contractual term | 7 years 3 months 18 days | ||
Options outstanding, end of year aggregate intrinsic value | $83 | ||
Exercisable, end of year shares | 3,100,000 | ||
Exercisable, end of year weighted average exercise price | $55 | ||
Exercisable, end of year weighted average remaining contractual term | 5 years 7 months 6 days | ||
Exercisable, end of year aggregate intrinsic value | 37 | ||
Vested and expected to vest, end of year shares | 6,400,000 | ||
Vested and expected to vest, end of year weighted average exercise price | $54.50 | ||
Vested and expected to vest, end of year weighted average remaining contractual term | 7 years 2 months 12 days | ||
Vested and expected to vest, end of year aggregate intrinsic value | 81 | ||
Options outstanding, end of year | 6,600,000 | 6,300,000 | |
Options outstanding, end of year weighted average exercise price | $54.46 | $54.20 | |
Total intrinsic value of options exercised | 13 | 32 | 45 |
Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $14 | ||
Unrecognized stock-based compensation cost weighted average period | 1 year 4 months 24 days |
STOCK_OWNERSHIP_AND_COMPENSATI5
STOCK OWNERSHIP AND COMPENSATION PLANS (Activities Related to Stock Awards) (Details) (USD $) | 12 Months Ended | ||
Share data in Millions, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares outstanding, beginning of year | 0.7 | 1.2 | 2 |
Shares outstanding, beginning of year weighted average grant date fair value | $57.20 | $56.84 | $54.61 |
Shares granted | 0.7 | 0.8 | 0.8 |
Shares granted weighted average grant date fair value | $52.72 | $56.79 | $57.78 |
Shares vested | -0.3 | -0.5 | -0.9 |
Shares vested weighted average grant date fair value | $57.14 | $56.25 | $52.62 |
Shares forfeited and cancelled | 0 | -0.1 | -0.1 |
Shares forfeited and cancelled weighted average grant date fair value | $0 | $56.92 | $57.09 |
Adjustment to estimate of performance share units to be earned | 0.1 | -0.7 | -0.6 |
Adjustment to estimate of performance share units to be earned weighted average grant date fair value | $56.10 | $56.84 | $57.06 |
Shares outstanding, end of year | 1.2 | 0.7 | 1.2 |
Shares outstanding, end of year weighted average grant date fair value | $54.37 | $57.20 | $56.84 |
Total fair value of shares vested | 17,000,000 | 28,000,000 | 53,000,000 |
Stock-based compensation expense | 51,000,000 | 28,000,000 | 50,000,000 |
Income tax benefit related to stock-based compensation expense | 20,000,000 | 11,000,000 | 19,000,000 |
Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized stock-based compensation cost | $27,000,000 | ||
Unrecognized stock-based compensation cost weighted average period | 1 year 8 months 12 days |
STOCK_OWNERSHIP_AND_COMPENSATI6
STOCK OWNERSHIP AND COMPENSATION PLANS (Employee Stock Purchase Plan and Defined Contribution Plans) (Details) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Amended company match percentage of employee contributions | 5.00% | ||
Company's expense for contributions to its defined contribution plans | $73 | $71 | $73 |
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of maximum annual wages witheld for the ESPP | 10.00% | ||
Market price of company stock issued at a discount under the ESPP | 85.00% | ||
Number of shares available for award | 5,000,000 | ||
Shares purchased by eligible employees under ESPP | 392,000 | 404,000 | 406,000 |
STOCK_OWNERSHIP_AND_COMPENSATI7
STOCK OWNERSHIP AND COMPENSATION PLANS (Supplemental Deferred Compensation Plans) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Amended company match percentage of employee contributions | 5.00% | |
Cash surrender value of life insurance policies | $30,000,000 | $29,000,000 |
Supplemental Deferred Compensation Plan [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
SDCP salary deferral | 50.00% | |
SDCP variable incentive compensation deferral | 95.00% | |
Amended company match percentage of employee contributions | 5.00% | |
SDCP accrual | 49,000,000 | 50,000,000 |
Funds in a trust pertaining to all participant deferrals and company matching amounts related to the SDCP | 49,000,000 | 50,000,000 |
SDCP II [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Company match percentage of employee contributions | 25.00% | |
SDCP accrual | 36,000,000 | 34,000,000 |
SDCP salary deferral monetary | 20,000 | |
Deferred compensation arrangement with individual, employer contribution | 5,000 | |
SDCP II vesting period | four | |
SDCP II graded vesting percentage | 25.00% | |
Cash surrender value of life insurance policies | $30,000,000 | $29,000,000 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Narrative) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Years | |||
Debt Instrument [Line Items] | |||
2015 | $193 | ||
2016 | 148 | ||
2017 | 104 | ||
2018 | 66 | ||
2019 | 47 | ||
2020 and thereafter | 163 | ||
Minimum lease payments | 721 | ||
Noncancelable sub-lease income | 0 | ||
Net minimum lease payments | 721 | ||
Operating leases, rent expense | 242 | 223 | 211 |
Total noncancelable future purchase commitments | 235 | ||
Noncancelable future purchase commitments, to be incurred in 2015 | 80 | ||
Noncancelable future purchase commitments, to be incurred in 2016 and 2017 | 111 | ||
Remaining terms of lease obligations, minimum | 9 | ||
Remaining terms of lease obligations, maximum | 33 | ||
Litigation reserves | 11 | 5 | |
Self-insurance reserves | 113 | 121 | |
Noncancellable future purchase commitments, to be incurred thereafter | 81 | ||
Letter of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Letters of credit outstanding, amount | 69 | ||
Line of Credit [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Current Borrowing Capacity | $85 | ||
Debt instrument, maturity date | 17-Nov-15 |
DISCONTINUED_OPERATIONS_Narrat
DISCONTINUED OPERATIONS (Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2013 | Jun. 30, 2013 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Definitive agreement amount, sale of HemoCue | $300 | ||||
Asset impairment and loss on sale of business | 0 | 17 | 86 | ||
Income tax expense (benefit) | -4 | -10 | 0 | ||
HemoCue [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
After tax gain on disposal of discontinued operations | 14 | 14 | 14 | ||
HemoCue [Member] | Re-evaluation of Deferred Tax Assets [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income tax expense (benefit) | 8 | ||||
HemoCue [Member] | Remeasurement of Deferred Tax Assets [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income tax expense (benefit) | 4 | ||||
NID [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Discrete tax benefit | $20 |
DISCONTINUED_OPERATIONS_Discon
DISCONTINUED OPERATIONS (Discontinued Operations) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Discontinued Operations and Disposal Groups [Abstract] | |||
Net revenues | $0 | $28 | $117 |
Income (loss) from discontinued operations before taxes | 1 | 25 | -74 |
Income tax expense (benefit) | -4 | -10 | 0 |
Income (loss) from discontinued operations, net of taxes | $5 | $35 | ($74) |
BUSINESS_SEGMENT_INFORMATION_D
BUSINESS SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Percentage of net revenues from the DIS business | 90.00% | 90.00% | 90.00% | |||||||||||||||||||
Total net revenues | $1,883 | [1],[2] | $1,904 | [1],[3] | $1,902 | [1],[4] | $1,746 | [1],[5] | $1,756 | [1],[6] | $1,788 | [1],[7] | $1,815 | [1],[8] | $1,787 | [1],[9] | $7,435 | [1] | $7,146 | [1] | $7,383 | |
Total operating income | 983 | 1,475 | 1,201 | |||||||||||||||||||
Non-operating expenses, net | -134 | -127 | -133 | |||||||||||||||||||
Income from continuing operations before taxes | 849 | 1,348 | 1,068 | |||||||||||||||||||
Income tax expense | 262 | 500 | 402 | |||||||||||||||||||
Income from continuing operations | 195 | [1],[2] | 139 | [1],[3] | 142 | [1],[4] | 111 | [1],[5] | 151 | [1],[6] | 412 | [1],[7] | 161 | [1],[8] | 124 | [1],[9] | 587 | [1] | 848 | [1] | 666 | |
Income (loss) from discontinued operations, net of taxes | 5 | 35 | -74 | |||||||||||||||||||
Net income | 200 | [1],[2] | 139 | [1],[3] | 142 | [1],[4] | 111 | [1],[5] | 151 | [1],[6] | 414 | [1],[7] | 174 | [1],[8] | 144 | [1],[9] | 592 | [1] | 883 | [1] | 592 | |
Less: net income attributable to noncontrolling interests | 10 | [1],[2] | 10 | [1],[3] | 9 | [1],[4] | 7 | [1],[5] | 8 | [1],[6] | 9 | [1],[7] | 9 | [1],[8] | 8 | [1],[9] | 36 | [1] | 34 | [1] | 36 | |
Net income attributable to Quest Diagnostics | 190 | [1],[2] | 129 | [1],[3] | 133 | [1],[4] | 104 | [1],[5] | 143 | [1],[6] | 405 | [1],[7] | 165 | [1],[8] | 136 | [1],[9] | 556 | [1] | 849 | [1] | 556 | |
Depreciation and amortization | 314 | 283 | 287 | |||||||||||||||||||
Depreciation and amortization, discontinued operations | 0 | 0 | 9 | |||||||||||||||||||
Total capital expenditures | 308 | 231 | 182 | |||||||||||||||||||
Capital expenditures: discontinued operations | 0 | 0 | 2 | |||||||||||||||||||
Continuing Operations [Member] | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Depreciation and amortization | 314 | 283 | 278 | |||||||||||||||||||
Total capital expenditures | 308 | 231 | 180 | |||||||||||||||||||
DIS business [Member] | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Total net revenues | 6,873 | [10] | 6,587 | [10] | 6,820 | [10] | ||||||||||||||||
Total operating income | 1,068 | [10] | 1,201 | [10] | 1,370 | [10] | ||||||||||||||||
Depreciation and amortization | 206 | [10] | 189 | [10] | 188 | [10] | ||||||||||||||||
Total capital expenditures | 283 | [10] | 196 | [10] | 145 | [10] | ||||||||||||||||
All other operating segments [Member] | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Total net revenues | 562 | [10] | 559 | [10] | 563 | [10] | ||||||||||||||||
Total operating income | 94 | [10] | 76 | [10] | 67 | [10] | ||||||||||||||||
Depreciation and amortization | 13 | [10] | 12 | [10] | 13 | [10] | ||||||||||||||||
Total capital expenditures | 17 | [10] | 26 | [10] | 24 | [10] | ||||||||||||||||
General corporate income (expenses), Net [Member] | ||||||||||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||||||||||
Total operating income | -179 | 198 | -236 | |||||||||||||||||||
Depreciation and amortization | 95 | 82 | 77 | |||||||||||||||||||
Total capital expenditures | $8 | $9 | $11 | |||||||||||||||||||
[1] | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). | |||||||||||||||||||||
[2] | Includes pre-tax charges of $30 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $13 million, $16 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $5 million, principally representing costs incurred related to legal matters, and a pre-tax gain included in other operating (income) expense, net of $9 million associated with a decrease in the fair value of the contingent consideration accrual associated with the Summit Health acquisition. Income from continuing operations includes a discrete benefit of $44 million associated with the favorable resolution of certain tax contingencies. | |||||||||||||||||||||
[3] | Includes pre-tax charges of $40 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $14 million, $25 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $8 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||||
[4] | Includes pre-tax charges of $27 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $16 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $7 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||||
[5] | Includes pre-tax charges of $24 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $12 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $4 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||||
[6] | Includes pre-tax charges of $12 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $5 million were included in cost of services and selling, general and administrative expenses, respectively. | |||||||||||||||||||||
[7] | Includes pre-tax charges of $39 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $28 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax gain on sale of royalty rights of $474 million and the pre-tax loss of $40 million associated with the sale of the Enterix (see Note 6). | |||||||||||||||||||||
[8] | Includes pre-tax charges of $19 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Income from discontinued operations, net of taxes includes a gain on the sale of HemoCue of $14 million (see Note 18). | |||||||||||||||||||||
[9] | Includes pre-tax charges of $45 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $18 million and $27 million were included in cost of services and selling, general and administrative expenses, respectively. | |||||||||||||||||||||
[10] | Text selection found with no content. |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||
In Millions, except Per Share data, unless otherwise specified | Nov. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 29, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 |
Subsequent Event [Line Items] | ||||||||||||||
Restructuring charges | $44 | $76 | $61 | |||||||||||
Original dividend payable per share | $0.17 | |||||||||||||
Dividend program | $0.33 | $0.30 | $0.30 | $0.33 | $0.33 | $0.33 | $0.30 | $0.30 | $0.30 | $0.17 | $0.17 | $0.17 | ||
Subsequent Event [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Original dividend payable per share | $0.33 | |||||||||||||
Dividend program | $0.38 |
Quarterly_Operating_Results_un2
Quarterly Operating Results (unaudited) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||||||||||||
In Millions, except Per Share data, unless otherwise specified | Jul. 18, 2013 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2013 | Sep. 30, 2013 | ||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||||||||||||||
Net revenues | $1,883 | [1],[2] | $1,904 | [1],[3] | $1,902 | [1],[4] | $1,746 | [1],[5] | $1,756 | [1],[6] | $1,788 | [1],[7] | $1,815 | [1],[8] | $1,787 | [1],[9] | $7,435 | [1] | $7,146 | [1] | $7,383 | |||
Gross Profit | 699 | [1],[2] | 726 | [1],[3] | 728 | [1],[4] | 645 | [1],[5] | 705 | [1],[6] | 699 | [1],[7] | 721 | [1],[8] | 695 | [1],[9] | 2,798 | [1] | 2,820 | [1] | ||||
Income from continuing operations | 195 | [1],[2] | 139 | [1],[3] | 142 | [1],[4] | 111 | [1],[5] | 151 | [1],[6] | 412 | [1],[7] | 161 | [1],[8] | 124 | [1],[9] | 587 | [1] | 848 | [1] | 666 | |||
Income (loss) from discontinued operations, net of taxes | 5 | [1],[2] | 0 | [1],[3] | 0 | [1],[4] | 0 | [1],[5] | 0 | [1],[6] | 2 | [1],[7] | 13 | [1],[8] | 20 | [1],[9] | 5 | [1] | 35 | [1] | -74 | |||
Net income | 200 | [1],[2] | 139 | [1],[3] | 142 | [1],[4] | 111 | [1],[5] | 151 | [1],[6] | 414 | [1],[7] | 174 | [1],[8] | 144 | [1],[9] | 592 | [1] | 883 | [1] | 592 | |||
Less: net income attributable to noncontrolling interests | 10 | [1],[2] | 10 | [1],[3] | 9 | [1],[4] | 7 | [1],[5] | 8 | [1],[6] | 9 | [1],[7] | 9 | [1],[8] | 8 | [1],[9] | 36 | [1] | 34 | [1] | 36 | |||
Net income attributable to Quest Diagnostics | 190 | [1],[2] | 129 | [1],[3] | 133 | [1],[4] | 104 | [1],[5] | 143 | [1],[6] | 405 | [1],[7] | 165 | [1],[8] | 136 | [1],[9] | 556 | [1] | 849 | [1] | 556 | |||
Income from continuing operations | 185 | [1],[2] | 129 | [1],[3] | 133 | [1],[4] | 104 | [1],[5] | 143 | [1],[6] | 403 | [1],[7] | 152 | [1],[8] | 116 | [1],[9] | 551 | [1] | 814 | [1] | 630 | |||
Income from continuing operations | $1.27 | [1],[2] | $0.89 | [1],[3] | $0.92 | [1],[4] | $0.72 | [1],[5] | $0.98 | [1],[6] | $2.68 | [1],[7] | $0.99 | [1],[8] | $0.73 | [1],[9] | $3.80 | [1] | $5.35 | [1] | $3.96 | |||
Income (loss) from discontinued operations, per basic share | $0.03 | [1],[2] | $0 | [1],[3] | $0 | [1],[4] | $0 | [1],[5] | ($0.01) | [1],[6] | $0.02 | [1],[7] | $0.08 | [1],[8] | $0.13 | [1],[9] | $0.03 | [1] | $0.23 | [1] | ($0.47) | |||
Net income | $1.30 | [1],[2] | $0.89 | [1],[3] | $0.92 | [1],[4] | $0.72 | [1],[5] | $0.97 | [1],[6] | $2.70 | [1],[7] | $1.07 | [1],[8] | $0.86 | [1],[9] | $3.83 | [1] | $5.58 | [1] | $3.49 | |||
Income from continuing operations | $1.26 | [1],[2] | $0.88 | [1],[3] | $0.92 | [1],[4] | $0.71 | [1],[5] | $0.97 | [1],[6] | $2.66 | [1],[7] | $0.99 | [1],[8] | $0.72 | [1],[9] | $3.78 | [1] | $5.31 | [1] | $3.92 | |||
Income (loss) from discontinued operations, per diluted share | $0.03 | [1],[2] | $0 | [1],[3] | $0 | [1],[4] | $0 | [1],[5] | $0 | [1],[6] | $0.02 | [1],[7] | $0.08 | [1],[8] | $0.13 | [1],[9] | $0.03 | [1] | $0.23 | [1] | ($0.46) | |||
Net income | $1.29 | [1],[2] | $0.88 | [1],[3] | $0.92 | [1],[4] | $0.71 | [1],[5] | $0.97 | [1],[6] | $2.68 | [1],[7] | $1.07 | [1],[8] | $0.85 | [1],[9] | $3.81 | [1] | $5.54 | [1] | $3.46 | |||
Benefit from certain income tax contingencies | 44 | |||||||||||||||||||||||
Restructuring & integration charges | 30 | 40 | 27 | 24 | 12 | 39 | 19 | 45 | ||||||||||||||||
Gain on sale of royalty rights | -474 | 0 | 474 | 0 | ||||||||||||||||||||
Asset impairment and loss on sale of business | 0 | 17 | 86 | |||||||||||||||||||||
Valuation allowance, amount | 60 | 34 | 60 | 34 | ||||||||||||||||||||
Royalty Agreement Terms [Member] | ||||||||||||||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||||||||||||||
Gain on sale of royalty rights | 474 | |||||||||||||||||||||||
HemoCue [Member] | ||||||||||||||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||||||||||||||
After tax gain on disposal of discontinued operations | 14 | 14 | 14 | |||||||||||||||||||||
Enterix [Member] | ||||||||||||||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||||||||||||||
Loss on sale of businesses, net | 40 | 40 | ||||||||||||||||||||||
Cost of Services [Member] | ||||||||||||||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||||||||||||||
Restructuring & integration charges | 13 | 14 | 11 | 12 | 7 | 11 | 7 | 18 | ||||||||||||||||
Selling, general and administrative [Member] | ||||||||||||||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||||||||||||||
Restructuring & integration charges | 16 | 25 | 16 | 12 | 5 | 28 | 12 | 27 | ||||||||||||||||
Selling, general and administrative [Member] | Legal Matters [Member] | ||||||||||||||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||||||||||||||
Restructuring & integration charges | 5 | 8 | 7 | 4 | ||||||||||||||||||||
Other Operating (Income) Expense [Member] | ||||||||||||||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||||||||||||||
Restructuring & integration charges | 1 | 1 | ||||||||||||||||||||||
Other Operating (Income) Expense [Member] | Contingent Consideration [Member] | ||||||||||||||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||||||||||||||
Restructuring & integration charges | $9 | |||||||||||||||||||||||
[1] | In December 2012, the Company committed to a plan to sell HemoCue and completed the sale of OralDNA. During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. Results of operations have been prepared to report the results of HemoCue, OralDNA and NID as discontinued operations for all periods presented (see Note 18). | |||||||||||||||||||||||
[2] | Includes pre-tax charges of $30 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $13 million, $16 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $5 million, principally representing costs incurred related to legal matters, and a pre-tax gain included in other operating (income) expense, net of $9 million associated with a decrease in the fair value of the contingent consideration accrual associated with the Summit Health acquisition. Income from continuing operations includes a discrete benefit of $44 million associated with the favorable resolution of certain tax contingencies. | |||||||||||||||||||||||
[3] | Includes pre-tax charges of $40 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $14 million, $25 million and $1 million were included in cost of services, selling, general and administrative expenses and other operating (income) expense, net, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $8 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||||||
[4] | Includes pre-tax charges of $27 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $16 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $7 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||||||
[5] | Includes pre-tax charges of $24 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $12 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax charges in selling, general and administrative expenses of $4 million, principally representing costs incurred related to legal matters. | |||||||||||||||||||||||
[6] | Includes pre-tax charges of $12 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $5 million were included in cost of services and selling, general and administrative expenses, respectively. | |||||||||||||||||||||||
[7] | Includes pre-tax charges of $39 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $11 million and $28 million were included in cost of services and selling, general and administrative expenses, respectively. Also includes pre-tax gain on sale of royalty rights of $474 million and the pre-tax loss of $40 million associated with the sale of the Enterix (see Note 6). | |||||||||||||||||||||||
[8] | Includes pre-tax charges of $19 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $7 million and $12 million were included in cost of services and selling, general and administrative expenses, respectively. Income from discontinued operations, net of taxes includes a gain on the sale of HemoCue of $14 million (see Note 18). | |||||||||||||||||||||||
[9] | Includes pre-tax charges of $45 million, primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company. Of these costs, $18 million and $27 million were included in cost of services and selling, general and administrative expenses, respectively. |
Schedule_II_Valuation_Accounts1
Schedule II - Valuation Accounts and Reserves (Details) (Allowance for Doubtful Accounts [Member], USD $) | 12 Months Ended | |||||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Allowance for Doubtful Accounts [Member] | ||||||
Movement in Valuation Allowances and Reserves [Roll Forward] | ||||||
Beginning balance | $236 | $236 | $237 | |||
Provision for doubtfull accounts | 296 | 270 | 269 | |||
Net deductions and other | 282 | [1] | 270 | [1] | 270 | [1] |
Ending balance | $250 | $236 | $236 | |||
[1] | Primarily represents the write-off of accounts receivable, net of recoveries. |