DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Jan. 31, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Document type | 10-K | ||
Amendment flag | false | ||
Document period end date | Dec. 31, 2016 | ||
Document fiscal year focus | 2,016 | ||
Document fiscal period focus | FY | ||
Entity registrant name | QUEST DIAGNOSTICS INC | ||
Entity central index key | 1,022,079 | ||
Current fiscal year end date | --12-31 | ||
Entity filer category | Large Accelerated Filer | ||
Entity public float | $ 11.3 | ||
Entity common stock, shares outstanding | 137,495,276 | ||
Entity current reporting status | Yes | ||
Entity voluntary filers | No | ||
Entity well-known seasoned issuer | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 359 | $ 133 |
Accounts receivable, net of allowance for doubtful accounts of $265 and $254 as of December 31, 2016 and 2015, respectively | 926 | 901 |
Inventories | 82 | 84 |
Prepaid expenses and other current assets | 155 | 207 |
Assets held for sale | 9 | 176 |
Total current assets | 1,531 | 1,501 |
Property, plant and equipment, net | 1,029 | 925 |
Goodwill | 6,000 | 5,905 |
Intangible assets, net | 949 | 984 |
Investments in equity method investees | 443 | 473 |
Other assets | 148 | 174 |
Total assets | 10,100 | 9,962 |
Liabilities and Stockholders' Equity | ||
Accounts payable and accrued expenses | 975 | 1,014 |
Current portion of long-term debt | 6 | 159 |
Total current liabilities | 981 | 1,173 |
Long-term debt | 3,728 | 3,492 |
Other liabilities | 654 | 514 |
Commitments and contingencies | ||
Quest Diagnostics stockholders’ equity: | ||
Common stock, par value $0.01 per share; 600 shares authorized as of both December 31, 2016 and 2015; 216 shares issued as of both December 31, 2016 and 2015 | 2 | 2 |
Additional paid-in capital | 2,545 | 2,481 |
Retained earnings | 6,613 | 6,199 |
Accumulated other comprehensive (loss) income | (72) | (38) |
Treasury stock, at cost; 79 shares and 73 shares as of December 31, 2016 and 2015, respectively | (4,460) | (3,960) |
Total Quest Diagnostics stockholders' equity | 4,628 | 4,684 |
Noncontrolling interests | 32 | 29 |
Total stockholders' equity | 4,660 | 4,713 |
Total liabilities and stockholders' equity | $ 10,100 | $ 9,962 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 265 | $ 254 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600 | 600 |
Common stock, shares issued | 216 | 216 |
Treasury stock, shares | 79 | 73 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Net revenues | $ 7,515 | $ 7,493 | $ 7,435 |
Operating costs, expenses and other income: | |||
Cost of services | 4,616 | 4,657 | 4,637 |
Selling, general and administrative | 1,681 | 1,679 | 1,728 |
Amortization of intangible assets | 72 | 81 | 94 |
Gain on disposition of business | (118) | (334) | 0 |
Other operating (income) expense, net | (13) | 11 | (7) |
Total operating costs, expenses, net | 6,238 | 6,094 | 6,452 |
Operating income | 1,277 | 1,399 | 983 |
Other income (expense): | |||
Interest expense, net | (143) | (153) | (164) |
Other (expense) income, net | (48) | (143) | 4 |
Total non-operating expenses, net | (191) | (296) | (160) |
Income from continuing operations before income taxes and equity in earnings of equity method investees | 1,086 | 1,103 | 823 |
Income tax expense | (429) | (373) | (262) |
Equity in earnings of equity method investees, net of taxes | 39 | 23 | 26 |
Income from continuing operations | 696 | 753 | 587 |
Income from discontinued operations, net of taxes | 0 | 0 | 5 |
Net income | 696 | 753 | 592 |
Less: Net income attributable to noncontrolling interests | 51 | 44 | 36 |
Net income attributable to Quest Diagnostics | 645 | 709 | 556 |
Amounts attributable to Quest Diagnostics' stockholders: | |||
Income from continuing operations | 645 | 709 | 551 |
Income from discontinued operations, net of taxes | 0 | 0 | 5 |
Net income attributable to Quest Diagnostics | $ 645 | $ 709 | $ 556 |
Earnings per share attributable to Quest Diagnostics' common stockholders - basic: | |||
Income from continuing operations | $ 4.58 | $ 4.92 | $ 3.80 |
Income from discontinued operations | 0 | 0 | 0.03 |
Net income | 4.58 | 4.92 | 3.83 |
Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: | |||
Income from continuing operations | 4.51 | 4.87 | 3.78 |
Income from discontinued operations | 0 | 0 | 0.03 |
Net income | 4.51 | 4.87 | 3.81 |
Dividends per common share | $ 1.65 | $ 1.52 | $ 1.32 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 696 | $ 753 | $ 592 |
Other comprehensive (loss) income: | |||
Currency translation | (34) | (15) | (7) |
Market valuation, net of tax | (2) | 0 | (1) |
Net deferred loss on cash flow hedges, net of tax | 2 | 3 | (10) |
Other | 0 | 1 | (1) |
Other comprehensive loss | (34) | (11) | (19) |
Comprehensive income | 662 | 742 | 573 |
Less: Comprehensive income attributable to noncontrolling interests | 51 | 44 | 36 |
Comprehensive income attributable to Quest Diagnostics | $ 611 | $ 698 | $ 537 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income | $ 696 | $ 753 | $ 592 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 249 | 304 | 314 |
Provision for doubtful accounts | 308 | 297 | 296 |
Deferred income tax provision | 37 | 112 | 23 |
Stock-based compensation expense | 69 | 52 | 51 |
Gain on disposition of business | (118) | (334) | 0 |
Other, net | (6) | 6 | (12) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (343) | (262) | (312) |
Accounts payable and accrued expenses | 56 | (24) | 74 |
Income taxes payable | 42 | (41) | (84) |
Termination of interest rate swap agreements | 54 | 0 | 0 |
Other assets and liabilities, net | 25 | (42) | 2 |
Net cash provided by operating activities | 1,069 | 821 | 944 |
Cash flows from investing activities: | |||
Business acquisitions, net of cash acquired | (139) | (67) | (728) |
Proceeds from sale of businesses | 270 | 0 | 0 |
Capital expenditures | (293) | (263) | (308) |
Investment in equity method investee | 0 | (33) | 0 |
Decrease in investments and other assets | 10 | 1 | 11 |
Net cash used in investing activities | (152) | (362) | (1,025) |
Cash flows from financing activities: | |||
Proceeds from borrowings | 1,869 | 2,453 | 2,018 |
Repayments of debt | (1,724) | (2,537) | (1,647) |
Purchases of treasury stock | (590) | (224) | (132) |
Exercise of stock options | 73 | 60 | 78 |
Employee payroll tax withholdings on stock issued under stock-based compensation plans | (10) | (7) | (6) |
Dividends paid | (223) | (212) | (187) |
Distributions to noncontrolling interests | (41) | (42) | (31) |
Sale of noncontrolling interest in subsidiary | 0 | 63 | 0 |
Payment of deferred business acquisition consideration | 0 | (51) | 0 |
Other financing activities, net | (45) | (21) | (7) |
Net cash (used in) provided by financing activities | (691) | (518) | 86 |
Net change in cash and cash equivalents | 226 | (59) | 5 |
Cash and cash equivalents, beginning of year | 133 | 192 | 187 |
Cash and cash equivalents, end of year | $ 359 | $ 133 | $ 192 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock, at Cost | Non-controlling Interests |
Balance, value at Dec. 31, 2013 | $ 3,973 | $ 2 | $ 2,379 | $ 5,358 | $ (8) | $ (3,783) | $ 25 |
Balance, shares at Dec. 31, 2013 | 144 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 592 | 556 | 36 | ||||
Other comprehensive loss, 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 | ||||||
Tax benefits associated with stock-based compensation plans | (3) | (3) | |||||
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans, value | (6) | (6) | |||||
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans, shares | |||||||
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 | ||||||
Balance, value at Dec. 31, 2013 | 0 | ||||||
Balance, value at Dec. 31, 2014 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 753 | ||||||
Net income | 751 | 709 | 42 | ||||
Other comprehensive loss, net of tax | (11) | (11) | |||||
Dividends declared | (219) | (219) | |||||
Distributions to noncontrolling interests | (42) | (42) | |||||
Issuance of common stock under benefit plans, value | 21 | 6 | 15 | ||||
Issuance of common stock under benefit plans, shares | 1 | ||||||
Stock-based compensation expense | 52 | 48 | 4 | ||||
Exercise of stock options, value | 60 | 60 | |||||
Exercise of stock options, shares | 1 | ||||||
Tax benefits associated with stock-based compensation plans | 5 | 5 | |||||
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans, value | (7) | (7) | |||||
Purchases of treasury stock, value | (224) | (224) | |||||
Purchases of treasury stock, shares | (3) | ||||||
Sale of redeemable noncontrolling interest | 11 | 11 | |||||
Adjustment to fair value | (14) | (14) | |||||
Balance, value at Dec. 31, 2015 | 4,713 | $ 2 | 2,481 | 6,199 | (38) | (3,960) | 29 |
Balance, shares at Dec. 31, 2015 | 143 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net income | 2 | ||||||
Sale of redeemable noncontrolling interest | 54 | ||||||
Adjustment to fair value | 14 | ||||||
Balance, value at Dec. 31, 2015 | 70 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 696 | ||||||
Net income | 689 | 645 | 44 | ||||
Other comprehensive loss, net of tax | (34) | (34) | |||||
Dividends declared | (231) | (231) | |||||
Distributions to noncontrolling interests | (41) | (41) | |||||
Issuance of common stock under benefit plans, value | 22 | 7 | 15 | ||||
Issuance of common stock under benefit plans, shares | |||||||
Stock-based compensation expense | 69 | 65 | 4 | ||||
Exercise of stock options, value | 73 | 2 | 71 | ||||
Exercise of stock options, shares | 1 | ||||||
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans, value | (10) | (10) | |||||
Purchases of treasury stock, value | (590) | $ (590) | |||||
Purchases of treasury stock, shares | (7) | (7.4) | |||||
Balance, value at Dec. 31, 2016 | 4,660 | $ 2 | $ 2,545 | $ 6,613 | $ (72) | $ (4,460) | $ 32 |
Balance, shares at Dec. 31, 2016 | 137 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net income | 7 | ||||||
Balance, value at Dec. 31, 2016 | $ 77 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS Background Quest Diagnostics Incorporated and its subsidiaries ("Quest Diagnostics" or the "Company") empower people to take action to improve health outcomes. The Company uses its extensive database of clinical lab results to derive diagnostic insights that reveal new avenues to identify and treat disease, inspire healthy behaviors and improve healthcare management. The Company's diagnostic information services business ("DIS") provides insights through clinical testing and related services to a broad range of customers, including patients, clinicians, hospitals, integrated delivery networks ("IDNs"), health plans, employers and accountable care organizations ("ACOs"). The Company offers the broadest access in the United States to diagnostic information services through its nationwide network of laboratories, patient service centers and phlebotomists in physician offices. The Company is the world's leading provider of diagnostic information services, which includes providing clinical testing services such as routine (including drugs-of-abuse) testing, gene-based and esoteric (including advanced diagnostics) testing, and anatomic pathology services, as well as related services and insights. The Company provides interpretive consultation with one of the largest medical and scientific staffs in the industry and hundreds of M.D.s and Ph.D.s, many of whom are recognized leaders in their fields. The Company's Diagnostic Solutions ("DS") businesses offer a variety of solutions for life insurers, healthcare providers and others. The Company is the leading provider of risk assessment services for the life insurance industry. In addition, the Company offers healthcare organizations, clinicians and patients robust information technology solutions. Prior to the sale of the Focus Diagnostics products business on May 13, 2016 (see Note 6), the Company's diagnostics products business manufactured and marketed diagnostic products. Prior to the contribution of its clinical trials testing business to the Q 2 Solutions joint venture on July 1, 2015 (see Note 6), the Company's clinical trials testing business was a leading provider of central laboratory testing for clinical trials. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
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 did not have any VIEs as of both December 31, 2016 and 2015 . All significant intercompany accounts and transactions are eliminated in consolidation. Equity Method Investments 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. These investments are classified as investments in equity method investees in the consolidated balance sheets. The Company records its pro rata share of the earnings, adjusted for accretion of basis difference, of these investments in equity in earnings of equity method investees, net of taxes in the consolidated statements of operations. The Company reviews its investments in equity method investees for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Basis of Presentation During the third quarter of 2006, the Company completed the wind-down of NID, a test kit manufacturing subsidiary. The accompanying consolidated statements of operations and related disclosures report the results of NID as discontinued operations for all periods presented. See Note 18 for a further discussion of discontinued operations. Reclassifications As a result of the early adoption of the accounting standard update ("ASU") associated with simplifying several aspects of stock-based compensation, certain reclassifications have been made to the prior period financial statements to conform with the current period presentation. For further details regarding the impact of the ASU, see New Accounting Standards . 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% of the Company's consolidated net revenues for each of the years ended December 31, 2016 , 2015 and 2014 . 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. Revenues from the Company's risk assessment services, healthcare information technology, clinical trials testing (see Note 6 regarding the contribution of the clinical trials testing business to a newly formed joint venture effective July 1, 2015), and diagnostics products businesses (see Note 6 regarding the sale of the Focus Diagnostics products business on May 13, 2016) 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 awards 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. For further details regarding stock-based compensation, see Note 16. 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 operating 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 the average monthly exchange rates during the year. Resulting translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Gains and losses from foreign currency transactions, which are denominated in a currency other than the functional currency, 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. The Company's 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. As of December 31, 2016 and 2015 , receivables due from government payers under the Medicare and Medicaid programs represent approximately 15% and 16% , 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. As of both December 31, 2016 and 2015 , receivables due from patients represent approximately 17% 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 in the consolidated statements of operations. 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 of December 31, 2016 as follows: • buildings and improvements, ranging up to thirty-one and a half years; • laboratory equipment and furniture and fixtures, ranging from five to twelve 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, five years. In connection with the Company’s annual review of the estimated useful lives of its property, plant and equipment completed during the first quarter of 2016, the Company revised the estimated useful lives of certain classes of its property, plant and equipment. In order to better reflect the Company's current expectations regarding the use of its assets, the recent operational improvements from its Invigorate program and considering historical and other data, the Company revised the estimated useful lives of its laboratory equipment from a range of five to seven years to a range of seven to ten years, furniture and fixtures from a range of three to seven years to a range of five to twelve years and computer software obtained for internal use from three years to five years. The change in estimated useful lives was accounted for prospectively as a change in accounting estimate effective in the first quarter of 2016. The impact of this change for the year ended December 31, 2016, was a decrease in depreciation expense and an increase in operating income of $37 million and an increase in net income of $23 million , or $0.16 per share on a basic and diluted basis. 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 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. If, after assessing the totality of events or circumstances, the Company determines that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, then it is required to perform the first step of the two-step goodwill impairment test. Otherwise, no further analysis is required. 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 either a discounted cash flows analysis that converts future cash flow amounts into a single discounted present value amount or a market approach. The Company assesses the valuation methodology based upon the relevance and availability of the data at the time it performs the valuation. As part of the first step to assess potential impairment, management compares the estimate of fair value for the reporting unit to the carrying value of the reporting unit. If the carrying 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 and record any noted impairment loss. The Company performs its annual impairment test during the fourth quarter of the fiscal year ended December 31st. For the years ended December 31, 2016 and 2015 , the Company performed the qualitative assessment for its DIS and risk assessment services reporting units. Based on the totality of information available for the DIS and risk assessment services reporting units, the Company concluded that it was more-likely-than-not that the estimated fair values were greater than the carrying values of the reporting units, and as such, no further analysis was required. For the year ended December 31, 2015 , the Company performed step one of the goodwill impairment test for its diagnostic products reporting unit, which was disposed of in 2016 as a result of the sale of the Focus Diagnostics products business (see Note 6), and concluded that goodwill of the reporting unit was not impaired. 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. 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 tests completed during the fourth quarter of the years ended December 31, 2016 and 2015 , 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's investments, which are included in other assets in the consolidated balance sheets, are comprised of trading securities, available-for-sale securities and other investments. The classification of an investment depends on our intent and ability to hold the investment. • Trading 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). Trading securities are carried at fair value with both realized and unrealized gains and losses recorded currently in earnings as a component of non-operating expenses within other (expense) income, net in the consolidated statements of operations. For the years ended December 31, 2016 , 2015 and 2014 , gains from trading equity securities totaled $3 million , $0 million , and $3 million , respectively. • Available-for-sale equity securities consists of an investment in registered shares of a public corporation. Available-for-sale equity securities are carried at fair value with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive loss within stockholders' equity and realized gains and losses recorded in other (expense) income, net in the consolidated statements of operations. As of December 31, 2016 , the Company had gross unrealized losses from available-for-sale equity securities of $5 million . • 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. 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 as of December 31, 2016 and 2015 consisted of the following: 2016 2015 Available-for-sale equity securities $ 3 $ 6 Trading equity securities 51 49 Other investments 6 8 Total $ 60 $ 63 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, interest rate 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 May 2014, the Financial Accounting Standards Board ("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. In August 2015, the FASB deferred the effective date of this ASU to the first quarter of 2018, with early adoption permitted beginning in the first quarter of 2017. The ASU can be applied using a full retrospective method or a modified retrospective method of adoption. The Company expects to adopt the ASU in the first quarter of 2018 using the full retrospective method and continues to assess the impact of this ASU on its results of operations, financial position and cash flows. Based on its preliminary assessment, the Company expects the majority of the amounts that have historically been classified as bad debt expense, primarily related to patient responsibility, will be reflected as a reduction of the transaction price and therefore as a reduction in revenue. The adoption of this ASU is not expected to have a material impact on the Company's financial position or cash flows. In January 2016, the FASB issued an ASU on the recognition and measurement of financial assets and financial liabilities. This ASU requires that all equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. However, companies may elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. In addition, the AS |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2016 | |
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): 2016 2015 2014 Amounts attributable to Quest Diagnostics’ stockholders: Income from continuing operations $ 645 $ 709 $ 551 Income from discontinued operations, net of taxes — — 5 Net income attributable to Quest Diagnostics’ common stockholders $ 645 $ 709 $ 556 Income from continuing operations $ 645 $ 709 $ 551 Less: Earnings allocated to participating securities 3 3 2 Earnings available to Quest Diagnostics’ common stockholders – basic and diluted $ 642 $ 706 $ 549 Weighted average common shares outstanding – basic 140 144 145 Effect of dilutive securities: Stock options and performance share units 2 1 — Weighted average common shares outstanding – diluted 142 145 145 Earnings per share attributable to Quest Diagnostics’ common stockholders – basic: Income from continuing operations $ 4.58 $ 4.92 $ 3.80 Income from discontinued operations — — 0.03 Net income $ 4.58 $ 4.92 $ 3.83 Earnings per share attributable to Quest Diagnostics’ common stockholders – diluted: Income from continuing operations $ 4.51 $ 4.87 $ 3.78 Income from discontinued operations — — 0.03 Net income $ 4.51 $ 4.87 $ 3.81 The following securities were not included in the calculation of diluted earnings per share due to their antidilutive effect: 2016 2015 2014 Stock options and performance share units 1 2 2 |
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES | 12 Months Ended |
Dec. 31, 2016 | |
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. Invigorate has consisted of several flagship programs, with structured plans in each, to drive savings and improve performance across the customer value chain. These flagship programs include: organization excellence; information technology excellence; procurement excellence; service excellence; lab excellence; and billing excellence. From 2012 through 2014, the Invigorate program was intended to partially offset reimbursement pressures and labor and benefit cost increases; free up additional resources to invest in science, innovation and other growth initiatives; and enable us to improve service quality and operating profitability. In January 2015, the Company adopted a program to further reduce its cost structure through 2017. This multi-year program continues to focus on the flagship program themes and additional key themes such as: standardizing processes, information technology systems, equipment and data; enhancing electronic enabling services; and enhancing reimbursement for work performed. The following table provides a summary of the Company's pre-tax restructuring charges associated with its Invigorate program and other restructuring activities: 2016 2015 2014 Employee separation costs $ 9 $ 38 $ 31 Facility-related costs 2 1 12 Asset impairment charges — — 1 Total restructuring charges $ 11 $ 39 $ 44 Total restructuring charges incurred for the years ended December 31, 2016 , 2015 and 2014 were primarily associated with various workforce reduction initiatives as the Company continued to simplify and restructure its organization. Of the total restructuring charges incurred during the year ended December 31, 2016 , $6 million and $5 million were recorded in cost of services and selling, general and administrative expenses, respectively. Of the total restructuring charges incurred during the year ended December 31, 2015 , $32 million and $7 million were recorded in cost of services and selling, general and administrative expenses, respectively. Of the total 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. 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, 2016 and 2015 , which is included in accrued expenses in Note 12: Employee Separation Costs Facility-Related Costs Total Balance, December 31, 2014 $ 18 $ 11 $ 29 Income statement expense 38 1 39 Cash payments (40 ) (6 ) (46 ) Other / adjustments — (3 ) (3 ) Balance, December 31, 2015 16 3 19 Income statement expense 9 2 11 Cash payments (19 ) (2 ) (21 ) Balance, December 31, 2016 $ 6 $ 3 $ 9 |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS 2016 Acquisitions During 2016, the Company completed acquisitions for an aggregate purchase price of $139 million , including the acquisition of the outreach laboratory service business of Clinical Laboratory Partners, LLC discussed below. The 2016 acquisitions resulted in goodwill of $95 million , all of which is deductible for tax purposes. These acquisitions also resulted in $44 million of intangible assets, principally comprised of customer-related intangibles. Acquisition of the Outreach Laboratory Service Business of Clinical Laboratory Partners, LLC On February 29, 2016, the Company completed the acquisition of the outreach laboratory service business of Clinical Laboratory Partners, LLC ("CLP"), a wholly-owned subsidiary of Hartford HealthCare Corporation, in an all-cash transaction for $135 million . CLP provides clinical testing services to physicians, hospitals, clinics and long-term care facilities in Connecticut. The assets acquired principally consist of $91 million of tax deductible goodwill and $43 million of customer-related intangible assets, which are being amortized over a useful life of 15 years. 2015 Acquisitions During 2015, the Company completed acquisitions for an aggregate purchase price of $63 million , including the acquisition of MemorialCare Health System's laboratory outreach business and Superior Mobile Medics, Inc. acquisitions discussed below. The acquisitions in 2015 resulted in goodwill of $33 million , of which $32 million is deductible for tax purposes. These acquisitions also resulted in $26 million of intangible assets, principally comprised of customer-related intangibles. Acquisition of MemorialCare Health System's Laboratory Outreach Business On August 3, 2015, the Company completed the acquisition of MemorialCare Health System's laboratory outreach business ("MemorialCare") in an all-cash transaction valued at $35 million . The assets acquired primarily represent tax deductible goodwill and intangible assets, principally comprised of customer-related intangibles. Acquisition of the Business Assets of Superior Mobile Medics, Inc. On November 16, 2015, the Company completed the acquisition of the business assets of Superior Mobile Medics, Inc. ("Superior Mobile Medics"), a national provider of paramedical and health data collection services to the life insurance and employer health and wellness industries, in an all-cash transaction valued at $27 million . The assets acquired primarily represent accounts receivable, tax deductible goodwill and intangible assets, principally comprised of customer-related intangibles. 2014 Acquisitions During 2014, the Company completed acquisitions for an aggregate purchase price of $768 million , including the acquisitions of Solstas Lab Partners Group, Summit Health, Inc. and Steward Health Care Systems, LLC's laboratory outreach business discussed below. The acquisitions in 2014 resulted in goodwill of $383 million , of which $90 million is deductible for tax purposes. These acquisitions also resulted in $270 million of intangible assets, principally comprised of customer-related intangibles and tradenames. The following tables summarize the total consideration and the amounts of assets acquired and liabilities assumed for Solstas Lab Partners Group and Summit Health, Inc. acquisitions, which are further discussed below: 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 Fair Value Weighted Average Useful Life (in years) Fair Value Weighted Average Useful Life (in years) Allocation of purchase price: Cash and cash equivalents $ 9 $ 1 Accounts receivable, net 48 9 Other current assets 12 16 Property, plant and equipment, net 49 6 Goodwill 271 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 48 — Total assets acquired 647 162 Current liabilities 64 10 Non-current deferred income taxes 3 — Other non-current liabilities 8 — Total liabilities assumed 75 10 Net assets acquired $ 572 $ 152 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 was subject to post closing adjustments related to working capital and other items. 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 included 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 included $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 was dependent on the achievement of certain revenue targets in 2015, with a maximum payment of $25 million in 2016. Based on actual 2015 revenue results for Summit Health compared to the earn-out target included in the contingent consideration arrangement, no payment was required, and therefore, the contingent consideration accrual was $0 as of December 31, 2015. 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's Laboratory Outreach Business On April 16, 2014, the Company completed the acquisition of the laboratory outreach 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 tax deductible goodwill and intangible assets, principally comprised of customer-related intangibles. The contingent consideration arrangement secures the seller's compliance with a non-compete agreement under which the Company will pay up to $5 million , ratably through 2018, provided the non-compete agreement is not violated. For further details regarding the fair value of the estimated contingent consideration associated with the Steward acquisition, see Note 7. General Information 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 consolidated financial statements include the results of operations of the acquisitions subsequent to the closing of each acquisition. All of the goodwill acquired in connection with the CLP, MemorialCare, Solstas, Summit Health and Steward acquisitions has been allocated to the Company's DIS business. The goodwill associated with the Superior Mobile Medics acquisition has been allocated to the Company's risk assessment services business. The goodwill recorded as part of the 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 all other acquisitions has not been included in the table below as these acquisitions were not material to the Company’s consolidated financial statements. 2014 (unaudited) Pro forma net revenues $ 7,520 Pro forma income from continuing operations $ 585 Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: Pro forma income from continuing operations $ 3.79 Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: Pro forma income from continuing operations $ 3.77 |
DISPOSITIONS AND HELD FOR SALE
DISPOSITIONS AND HELD FOR SALE | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSITIONS AND HELD FOR SALE | DISPOSITIONS AND HELD FOR SALE Sale of Focus Diagnostics Products On March 29, 2016, the Company entered into a definitive agreement to sell the assets of its non-core Focus Diagnostics products business ("Focus Diagnostics") to DiaSorin S.p.A. ("DiaSorin"). On May 13, 2016, the Company completed the sale of Focus Diagnostics for $300 million in cash, or $293 million net of transaction costs and working capital adjustments, which includes $25 million of proceeds held in escrow. For the year ended December 31, 2016, the Company recorded a $118 million pre-tax gain on disposition of business. The Company also recorded income tax expense of $84 million , consisting of $91 million of current income tax expense (all of which was paid in 2016) and a deferred income tax benefit of $7 million . The income tax expense resulted in an effective tax rate of 71.4% , which was significantly in excess of the statutory tax rate primarily due to a lower tax basis in the assets sold, specifically the goodwill associated with the disposition. The assets disposed of consisted of $113 million of goodwill, $30 million of intangible assets, with the remaining $38 million consisting of accounts receivable, inventories and property, plant and equipment. In addition, the disposition included liabilities of $6 million . As of December 31, 2015, the assets to be disposed of as part of the transaction primarily consisted of $113 million of goodwill, with the remainder consisting of property, plant and equipment, inventories and intangible assets, which were classified and included in current assets held for sale. In connection with the sale, the Company entered into a five year supply agreement with DiaSorin. The supply agreement, which does not include a minimum purchase commitment, enables the Company to purchase certain products and supplies used in its DIS business. Purchases by the Company under this supply agreement subsequent to the sale of Focus Diagnostics were not material. Focus Diagnostics, prior to May 13, 2016, was included in all other operating segments and has not been classified as a discontinued operation. For further details regarding business segment information, see Note 19. Contribution of Clinical Trials Business On March 30, 2015, the Company entered into a definitive agreement with Quintiles Transnational Holdings, Inc. (now know as Quintiles IMS Holdings, Inc.) to form a global clinical trials central laboratory services joint venture, Q 2 Solutions. The transaction closed on July 1, 2015. In connection with the transaction, the Company contributed certain assets of its clinical trials testing business ("Clinical Trials") and $33 million of cash to the newly formed joint venture in exchange for a non-controlling, 40% ownership interest. The assets of Clinical Trials contributed to the joint venture, principally consisting of property, plant and equipment and goodwill, were classified as assets held for sale in the first quarter of 2015 and were contributed to Q 2 Solutions upon closing of the transaction. Subsequent to closing, the Company's ownership interest in the joint venture is being accounted for under the equity method of accounting. As of December 31, 2016 and 2015, the investment in Q 2 Solutions had a carrying value of $389 million and $416 million , respectively. During the third quarter of 2015, the Company recognized a pre-tax gain of $334 million based on the difference between the fair value of the Company's equity interest in the newly formed joint venture over the carrying value of the assets contributed. The fair value of the Company's equity interest was determined using discounted cash flows. The most significant assumptions used in the valuation include a discount rate ( 12% ), a long-term growth rate ( 2.5% ) and EBITDA margins. In connection with the gain, the Company recorded a deferred income tax liability of $145 million . Upon formation, the Company's investment in Q 2 Solutions exceeded its equity in the underlying net assets by approximately $219 million . This basis difference is attributable to finite-lived assets, indefinite-lived intangible assets and goodwill of the joint venture. The basis difference associated with the finite-lived assets of $75 million is being amortized over a weighted average useful life of 8 years as a reduction to the carrying value of the investment in equity method investees and corresponding reduction in equity in earnings of equity method investees, net of taxes. Q 2 Solutions is considered a related party to the Company due to the Company's non-controlling ownership interest in Q 2 Solutions and the Company's continuing involvement in providing diagnostic information services on an ongoing basis. In addition, the Company provides transition services to Q 2 Solutions for a limited period of time. For further details regarding related parties, see Note 20. Clinical Trials, prior to July 1, 2015, was included in all other operating segments and has not been classified as discontinued operations. For further details regarding business segment information, see Note 19. DISCONTINUED OPERATIONS During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. The Company will continue to report NID as a discontinued operation until uncertain tax benefits associated with NID are resolved. The results of operations for NID have been classified as discontinued operations for all periods presented. Summarized financial information for the discontinued operations is set forth below: 2016 2015 2014 Net revenues $ — $ — $ — Income from discontinued operations before taxes — — 1 Income tax benefit — — (4 ) Income from discontinued operations, net of taxes $ — $ — $ 5 The remaining balance sheet information related to NID was not material as of December 31, 2016 and 2015 . |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2016 | |
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 Total Level 1 Level 2 Level 3 December 31, 2016 Assets: Trading securities $ 51 $ 51 $ — $ — Cash surrender value of life insurance policies 32 — 32 — Available-for-sale equity securities 3 3 — — Total $ 86 $ 54 $ 32 $ — Liabilities: Deferred compensation liabilities $ 91 $ — $ 91 $ — Interest rate swaps 88 — 88 — Contingent consideration 3 — — 3 Total $ 182 $ — $ 179 $ 3 December 31, 2015 Assets: Trading securities $ 49 $ 49 $ — $ — Cash surrender value of life insurance policies 29 — 29 — Interest rate swaps 23 — 23 — Available-for-sale equity securities 6 6 — — Total $ 107 $ 55 $ 52 $ — Liabilities: Deferred compensation liabilities $ 85 $ — $ 85 $ — Interest rate swaps 6 — 6 — Contingent consideration 3 — — 3 Total $ 94 $ — $ 91 $ 3 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. The trading securities are classified within Level 1 because the 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 classified within Level 2 of the fair value hierarchy 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 in registered shares of a publicly-held company. 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 April 2014, the Company completed the acquisitions of Summit Health and Steward (see Note 5). 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% . The estimated fair value of the contingent consideration associated with Summit Health was reduced to $13 million in the fourth quarter of 2014 and $0 in the second quarter of 2015. These reductions were a result of updated revenue forecasts and actual results for 2015 compared to the earn-out target included in the contingent consideration arrangement. As a result, other operating (income) expense, net for the years ended December 31, 2015 and 2014 included gains of $13 million and $9 million , respectively. The remaining contingent consideration associated with Steward is projected to be paid out in three equal annual installments, with a maximum payout of $4 million . The following table provides a reconciliation of the beginning and ending balances of liabilities using significant unobservable inputs (Level 3): Contingent Consideration Balance, December 31, 2014 $ 17 Settlements (1 ) Total (gains) losses - realized/unrealized: Included in earnings (13 ) Balance, December 31, 2015 3 Balance, December 31, 2016 $ 3 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. As of December 31, 2016 and 2015 , the fair value of the Company's debt was estimated at $3.9 billion and $3.7 billion , respectively. 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, 2016 | |
Income Tax Disclosure [Abstract] | |
TAXES ON INCOME | TAXES ON INCOME The Company's pre-tax income from continuing operations before equity in earnings of equity method investees consisted of approximately $1.1 billion , $1.1 billion and $810 million from U.S. operations and $4 million , $11 million and $13 million from foreign operations for the years ended December 31, 2016 , 2015 and 2014 , respectively. During the year ended December 31, 2016, the Company recorded $84 million of income tax expense, consisting of $91 million of current income tax expense and a deferred income tax benefit of $7 million , associated with the sale of Focus Diagnostics (see Note 6). In addition, the Company recognized a non-taxable gain on an escrow recovery associated with an acquisition. During the year ended December 31, 2015, the Company recognized $145 million deferred income tax expense associated with the financial reporting and tax basis difference resulting from the contribution of the Clinical Trials business to the Q 2 Solutions joint venture and a $58 million deferred income tax benefit resulting from the future tax effects of winding down a subsidiary. The components of income tax expense from continuing operations for 2016 , 2015 and 2014 were as follows: 2016 2015 2014 Current: Federal $ 346 $ 231 $ 204 State and local 45 27 34 Foreign 1 3 3 Deferred: Federal 33 104 28 State and local 4 7 (6 ) Foreign — 1 (1 ) Total $ 429 $ 373 $ 262 A reconciliation of the federal statutory rate to the Company's effective tax rate for 2016 , 2015 and 2014 was as follows: 2016 2015 2014 Tax provision at statutory rate 35.0 % 35.0 % 35.0 % State and local income taxes, net of federal benefit 3.3 2.6 3.2 Gains and losses on book and tax basis difference 3.3 (2.7 ) — Adjustments to unrecognized tax positions 0.5 (0.4 ) (5.1 ) Impact of noncontrolling interests (1.8 ) (1.6 ) (1.7 ) Impact of equity earnings 1.0 0.7 1.1 Other, net (1.8 ) 0.2 (0.7 ) Effective tax rate 39.5 % 33.8 % 31.8 % In 2016, the sale of Focus Diagnostics and the non-taxable gain on an escrow recovery associated with an acquisition resulted in the gains and losses on book and tax basis difference as discussed above. In 2015, the contribution of the Clinical Trials business to the Q 2 Solutions joint venture and winding down a subsidiary resulted in the gains and losses on book and tax basis difference as discussed above. In 2014, the adjustments to unrecognized tax positions mainly resulted from the favorable resolution of certain tax contingencies. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) as of December 31, 2016 and 2015 were as follows: 2016 2015 Non-current deferred tax assets (liabilities): Accounts receivable reserves $ 94 $ 95 Liabilities not currently deductible 189 202 Stock-based compensation 58 49 Capitalized R&D expense — 1 Basis differences in investments, joint ventures and subsidiaries (87 ) (90 ) Net operating loss carryforwards, net of valuation allowance 120 140 Depreciation and amortization (533 ) (517 ) Total non-current deferred tax liabilities, net $ (159 ) $ (120 ) As of December 31, 2016 and 2015 , non-current deferred tax assets of $32 million and $37 million , respectively, are recorded in other long-term assets. As of December 31, 2016 and 2015 , non-current deferred tax liabilities of $191 million and $157 million , respectively, are included in other long-term liabilities. As of December 31, 2016 , the Company had estimated net operating loss carryforwards for federal and state income tax purposes of $215 million and $1.4 billion , respectively, which expire at various dates through 2036 . Estimated net operating loss carryforwards for foreign income tax purposes are $57 million as of December 31, 2016 , some of which can be carried forward indefinitely while others expire at various dates through 2026 . As of December 31, 2016 , 2015 and 2014 , deferred tax assets associated with net operating loss carryforwards of $204 million , $222 million and $242 million , respectively, have each been reduced by valuation allowances of $56 million , $54 million and $60 million , respectively. The Company has not provided U.S. federal income and foreign tax withholdings on undistributed earnings from certain non-U.S. subsidiaries for which 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 as of December 31, 2016 and 2015 , were $62 million and $50 million , respectively. Prepaid income taxes were $14 million and $41 million as of December 31, 2016 and 2015, respectively, and were included in prepaid expenses and other current assets. The total amount of unrecognized tax benefits as of and for the years ended December 31, 2016 , 2015 and 2014 consisted of the following: 2016 2015 2014 Balance, beginning of year $ 91 $ 122 $ 168 Additions: For tax positions of current year 3 5 17 For tax positions of prior years 12 5 1 Reductions: Changes in judgment (1 ) (11 ) (56 ) Expirations of statutes of limitations (7 ) (3 ) (6 ) Settlements — (27 ) (2 ) Balance, end of year $ 98 $ 91 $ 122 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, 2016 , that, if recognized, would affect the effective income tax rate from continuing operations is $44 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 $11 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 (income) included in income tax expense in each of the years ended December 31, 2016 , 2015 and 2014 was approximately $2 million , $0 million and $(1) million respectively. As of December 31, 2016 and 2015 , the Company has approximately $12 million and $9 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 either completed its examinations of the Company's consolidated federal income tax returns or the statute of limitations has expired up through and including the 2012 tax year; however, the Company is pursuing 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, 2016 , a summary of the tax years that remain subject to examination, are under appeal, or are otherwise unresolved for the Company's major jurisdictions are: United States - federal 2009 , 2013 - 2016 United States - various states 2006 - 2016 |
SUPPLEMENTAL CASH FLOW & OTHER
SUPPLEMENTAL CASH FLOW & OTHER DATA | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW & OTHER DATA | SUPPLEMENTAL CASH FLOW & OTHER DATA Supplemental cash flow and other data for the years ended December 31, 2016 , 2015 and 2014 were as follows: 2016 2015 2014 Depreciation expense $ 177 $ 223 $ 220 Amortization expense 72 81 94 Depreciation and amortization expense $ 249 $ 304 $ 314 Interest expense $ (144 ) $ (154 ) $ (167 ) Interest income 1 1 3 Interest expense, net $ (143 ) $ (153 ) $ (164 ) Interest paid $ 148 $ 172 $ 170 Income taxes paid $ 361 $ 319 $ 327 Assets acquired under capital leases $ — $ 3 $ 12 Accounts payable associated with capital expenditures $ 9 $ 15 $ 26 Dividend payable $ 62 $ 55 $ 48 Businesses acquired: Fair value of assets acquired $ 139 $ 63 $ 853 Fair value of liabilities assumed — — 85 Fair value of net assets acquired 139 63 768 Merger consideration paid (payable), net — 4 (30 ) Cash paid for business acquisitions 139 67 738 Less: Cash acquired — — 10 Business acquisitions, net of cash acquired $ 139 $ 67 $ 728 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of December 31, 2016 and 2015 consisted of the following: 2016 2015 Land $ 28 $ 28 Buildings and improvements 379 370 Laboratory equipment and furniture and fixtures 1,462 1,407 Leasehold improvements 533 535 Computer software developed or obtained for internal use 834 756 Construction-in-progress 193 136 3,429 3,232 Less: Accumulated depreciation and amortization (2,400 ) (2,307 ) Total $ 1,029 $ 925 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The changes in goodwill for the years ended December 31, 2016 and 2015 were as follows: 2016 2015 Balance, beginning of year $ 5,905 $ 6,032 Goodwill acquired during the year 95 33 Reclassification to assets held for sale — (160 ) Balance, end of year $ 6,000 $ 5,905 Principally all of the Company’s goodwill as of December 31, 2016 and 2015 was associated with its DIS business. For the year ended December 31, 2016 , goodwill acquired during the period was principally associated with the CLP acquisition (see Note 5). For the year ended December 31, 2015 , goodwill acquired during the period was principally associated with the MemorialCare and Superior Mobile Medics acquisitions (see Note 5). The reclassification to assets held for sale was principally associated with Clinical Trials and Focus Diagnostics (see Note 6). Intangible assets as of December 31, 2016 and 2015 consisted of the following: Weighted Average Amort-ization Period (Years) December 31, 2016 December 31, 2015 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Amortizing intangible assets: Customer-related intangibles 18 $ 971 $ (346 ) $ 625 $ 936 $ (296 ) $ 640 Non-compete agreements 6 6 (4 ) 2 6 (3 ) 3 Technology 18 93 (40 ) 53 93 (35 ) 58 Other 9 103 (70 ) 33 106 (59 ) 47 Total 18 1,173 (460 ) 713 1,141 (393 ) 748 Intangible assets not subject to amortization: Tradenames 235 — 235 235 — 235 Other 1 — 1 1 — 1 Total intangible assets $ 1,409 $ (460 ) $ 949 $ 1,377 $ (393 ) $ 984 For the year ended December 31, 2016 , the Company recognized impairment charges associated with intangible assets of $7 million associated with certain customer related and other intangibles, which have been included in other operating (income) expense, net. For the year ended December 31, 2015 , the Company recognized impairment charges associated with intangible assets of $16 million associated with Celera products and winding down a subsidiary, which have been included in other operating (income) expense, net. Amortization expense related to intangible assets was $72 million , $81 million and $94 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of December 31, 2016 is as follows: Year Ending December 31, 2017 $ 69 2018 65 2019 64 2020 64 2021 57 Thereafter 394 Total $ 713 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses as of December 31, 2016 and 2015 consisted of the following: 2016 2015 Trade accounts payable $ 261 $ 279 Accrued wages and benefits (including incentive compensation) 316 305 Income taxes payable 3 4 Accrued interest 46 52 Accrued insurance 31 60 Merger consideration payable 2 2 Dividend payable 62 55 Accrued expenses 254 257 Total $ 975 $ 1,014 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instruments [Abstract] | |
DEBT | DEBT Long-term debt as of December 31, 2016 and 2015 consisted of the following: 2016 2015 3.20% Senior Notes due April 2016 — 150 2.70% Senior Notes due April 2019 300 300 4.75% Senior Notes due January 2020 521 522 2.50% Senior Notes due March 2020 299 299 4.70% Senior Notes due April 2021 563 554 4.25% Senior Notes due April 2024 307 313 3.50% Senior Notes due March 2025 568 601 3.45% Senior Notes due June 2026 469 — 6.95% Senior Notes due July 2037 174 247 5.75% Senior Notes due January 2040 244 368 4.70% Senior Notes due March 2045 300 300 Other 13 22 Debt issuance costs (24 ) (25 ) Total long-term debt 3,734 3,651 Less: Current portion of long-term debt 6 159 Total long-term debt, net of current portion $ 3,728 $ 3,492 Secured Receivables Credit Facility In October 2015, the Company amended and restated the agreement for the $ 525 million secured receivables credit facility (the “Secured Receivables Credit Facility”) entered into in December 2014, increasing the borrowing capacity under the facility to $600 million . The amended and restated Secured Receivables Credit Facility matures in October 2017 . Under the Secured Receivables Credit Facility, the Company can issue letters of credit totaling $100 million (see Note 17). Issued letters of credit reduce the available borrowing capacity under the facility. Borrowings under the Secured Receivables Credit Facility are collateralized by certain domestic receivables. As of December 31, 2016 and 2015 , interest on the borrowings under the Secured Receivables Credit Facility is based on commercial paper rates for highly-rated issuers plus 0.66% . As of both December 31, 2016 and 2015 , 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” or "Senior Unsecured Revolving 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 (see Note 17). Issued letters of credit reduce the available borrowing capacity under the 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. As of both December 31, 2016 and 2015 , 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. As of both December 31, 2016 and 2015 , there were no outstanding borrowings under the Credit Facility. Senior Notes Offerings In May 2016, the Company completed a $500 million senior notes offering (the "2016 Senior Notes"). The offering consisted of $500 million in aggregate principal of 3.45% senior notes due June 2026, issued at a discount of $1 million . The Company incurred $4 million of costs associated with the 2016 Senior Notes, which is included as a reduction to the carrying amount of long-term debt and is being amortized over the term of the related debt. The net proceeds from the 2016 Senior Notes were used to repay outstanding indebtedness under the senior unsecured revolving credit facility and the secured receivables credit facility and for general corporate purposes. In March 2015, the Company completed a $1.2 billion senior notes offering (the “2015 Senior Notes”) that was sold in three tranches: (a) $300 million aggregate principal amount of 2.50% senior notes due March 2020, issued at a discount of $1 million ; (b) $600 million aggregate principal amount of 3.50% senior notes due March 2025; and (c) $300 million aggregate principal amount of 4.70% senior notes due March 2045. The Company incurred $11 million of costs associated with the 2015 Senior Notes, which is included as a reduction to the carrying amount of long-term debt 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. Retirement of Debt In March 2016, the Company completed a cash tender offer to purchase up to $200 million aggregate principal amount of its 6.95% Senior Notes due July 2037 ("Senior Notes due 2037") and 5.75% Senior Notes due January 2040 ("Senior Notes due 2040"). The Company purchased $73 million of its Senior Notes due 2037 and $127 million of its Senior Notes due 2040. In March 2015, the Company completed a cash tender offer to purchase up to $250 million aggregate principal amount of its Senior Notes due 2037 and Senior Notes due 2040 using a portion of the proceeds from the 2015 Senior Notes. The Company purchased $176 million of its Senior Notes due 2037 and $74 million of its Senior Notes due 2040. In April 2015, the Company redeemed all of its 5.45% Senior Notes due November 2015, $150 million of its 3.20% Senior Notes due April 2016 and all of its 6.40% Senior Notes due July 2017 with the remaining proceeds from the 2015 Senior Notes. For the years ended December 31, 2016 and 2015, the Company recorded losses on retirement of debt, principally comprised of premiums paid, of $48 million and $144 million , respectively, in other (expense) income, net. Maturities of Long-Term Debt As of December 31, 2016 , long-term debt matures as follows: Year Ending December 31, 2017 $ 6 2018 4 2019 302 2020 801 2021 550 Thereafter 2,125 Total maturities of long-term debt 3,788 Unamortized discount (13 ) Debt issuance costs (24 ) Fair value basis adjustments attributable to hedged debt (17 ) Total long-term debt 3,734 Less: Current portion of long-term debt 6 Total long-term debt, net of current portion $ 3,728 |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2016 | |
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. In May 2016, the Company entered into interest rate lock agreements with several financial institutions for a total notional amount of $250 million which were accounted for as cash flow hedges. These agreements were entered into to hedge a portion of the Company’s interest rate exposure associated with variability in future cash flows attributable to changes in the ten-year treasury rates related to the planned issuance of the 2016 Senior Notes. In connection with the issuance of the 2016 Senior Notes, these agreements were settled, and the Company paid $1 million . These losses are deferred in stockholders’ equity, net of income taxes, as a component of accumulated other comprehensive loss, and amortized as an adjustment to interest expense, net over the term of the respective senior notes. In March 2015, the Company entered into interest rate lock agreements with several financial institutions for a total notional amount of $350 million which were accounted for as cash flow hedges. These agreements were entered into to hedge a portion of the Company’s interest rate exposure associated with variability in future cash flows attributable to changes in the five-year, ten-year and thirty-year treasury rates related to the planned issuance of the 2015 Senior Notes. In connection with the issuance of the 2015 Senior Notes, these agreements were settled and the Company received $3 million . These gains are deferred in stockholders’ equity, net of income taxes, as a component of accumulated other comprehensive loss, and amortized as an adjustment to interest expense, net over the term of the respective senior notes. During the fourth quarter of 2013 and first quarter of 2014, the Company entered into various forward starting interest rate swap agreements for an aggregate notional amount of $150 million which were accounted for as cash flow hedges. In connection with the issuance of the 2015 Senior Notes, all of these agreements were settled and the Company paid $17 million . These losses are deferred in stockholders’ equity, net of income taxes, as a component of accumulated other comprehensive loss, and amortized as an adjustment to interest expense, net over the term of the Senior Notes due 2025. 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, 2016 and 2015 was $10 million and $12 million , respectively. The loss recognized on the Company's cash flow hedges for the years ended December 31, 2016 , 2015 and 2014 , 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 $3 million . Interest Rate Derivatives – Fair Value Hedges The Company maintains various fixed-to-variable interest rate swaps to convert a portion of the Company's long-term debt into variable interest rate debt. A summary of the notional amounts of interest rate derivatives – fair value hedges as of December 31, 2016 and 2015 is as follows: Notional Amount Debt Instrument 2016 2015 4.75% Senior Notes due January 2020 $ — $ 350 4.70% Senior Notes due April 2021 — 400 4.25% Senior Notes due April 2024 250 250 3.50% Senior Notes due March 2025 600 200 3.45% Senior Notes due June 2026 350 — $ 1,200 $ 1,200 As of December 31, 2016 , the Company had entered into various fixed to variable interest rate swap agreements with an aggregate notional amount of $1.2 billion and variable interest rate ranging from one-month LIBOR plus 2.2% to one-month LIBOR plus 3.0% . As of December 31, 2015, the Company had entered into various fixed-to-variable interest rate swap agreements with an aggregate notional amount of $1.2 billion and variable interest rates ranging from one-month LIBOR plus 1.4% to one-month LIBOR plus 3.6% . In July 2016, the Company terminated those interest rate swaps agreements. As a result of the termination, the Company received proceeds of $60 million , which included $6 million of accrued interest. The remaining basis adjustment on the respective debt obligation of $54 million will be amortized as a reduction of interest expense over the remaining terms of the hedged debt instrument. Immediately after the termination of these interest rate swaps, the Company entered into new fixed-to-variable interest rate swap agreements, which are reflected in the table above. 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 . As of December 31, 2016 , the remaining unamortized basis adjustment associated with the terminated interest rate swap agreements totaled $71 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, 2016 , 2015 and 2014 as a result of hedge ineffectiveness. Interest Rate Derivatives - Economic Hedges In March 2016, in connection with the retirement of debt (see Note 13), the Company entered into reverse interest rate lock agreements with several financial institutions which were not designated for hedge accounting. The Company entered into these agreements to hedge the variability in cash flows associated with $75 million of the $200 million principal amount of debt that was retired in the first quarter of 2016. These agreements were settled during the first quarter of 2016 resulting in a gain of $1 million which was recognized in other (expense) income, net. In March 2015, in connection with the retirement of debt (see Note 13), the Company entered into reverse interest rate lock agreements with several financial institutions which were not designated for hedge accounting. The Company entered into these agreements to hedge the variability in cash flows associated with $280 million of the $1.3 billion principal amount of debt that was retired in the first and second quarters of 2015. These agreements were settled during the first and second quarters of 2015 which resulted in a gain of $3 million which was recognized in other (expense) income, net. A summary of the fair values of derivative instruments in the consolidated balance sheets is stated in the table below: December 31, 2016 December 31, 2015 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Derivatives Designated as Hedging Instruments Asset Derivatives: Interest rate swaps $ — Other assets $ 23 Liability Derivatives: Interest rate swaps Other liabilities 88 Other liabilities 6 Total Net Derivatives (Liabilities) Assets $ (88 ) $ 17 |
STOCKHOLDERS_ EQUITY AND REDEEM
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST | STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST 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 Income (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, net of taxes 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, 2016 , 2015 and 2014 , 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 income (loss) by component for 2016 , 2015 and 2014 were as follows: Foreign Currency Translation Adjustment Market Value Adjustment Net Deferred Loss on Cash Flow Hedges Other Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2013 $ (2 ) $ — $ (5 ) $ (1 ) $ (8 ) Other comprehensive income (loss) before reclassifications (7 ) (1 ) (11 ) (1 ) (20 ) Amounts reclassified from accumulated other comprehensive income (loss) — — 1 — 1 Net current period other comprehensive income (loss) (7 ) (1 ) (10 ) (1 ) (19 ) Balance, December 31, 2014 (9 ) (1 ) (15 ) (2 ) (27 ) Other comprehensive income (loss) before reclassifications (15 ) — — 1 (14 ) Amounts reclassified from accumulated other comprehensive income (loss) — — 3 — 3 Net current period other comprehensive income (loss) (15 ) — 3 1 (11 ) Balance, December 31, 2015 (24 ) (1 ) (12 ) (1 ) (38 ) Other comprehensive income (loss) before reclassifications (34 ) (2 ) — — (36 ) Amounts reclassified from accumulated other comprehensive income (loss) — — 2 — 2 Net current period other comprehensive income (loss) (34 ) (2 ) 2 — (34 ) Balance, December 31, 2016 $ (58 ) $ (3 ) $ (10 ) $ (1 ) $ (72 ) For the years ended December 31, 2016 , 2015 and 2014 , the gross deferred losses on cash flow hedges were reclassified from accumulated other comprehensive loss to interest expense, net. Dividend Program During each of the first three quarters of 2016, the Company's Board of Directors declared a quarterly cash dividend of $0.40 per common share. On November 11, 2016, the Company's Board of Directors authorized a quarterly cash dividend of $0.45 per common share. During each of the quarters of 2015, the Company's Board of Directors declared a quarterly cash dividend of $0.38 per common share. During each of the quarters in 2014, the Company's Board of Directors declared a quarterly cash dividend of $0.33 per common share. Share Repurchase Program In December 2016 and 2015, the Company’s Board of Directors authorized the Company to repurchase an additional $1 billion and $500 million , respectively, of the Company's common stock. As of December 31, 2016 , $1.4 billion remained available under the Company’s share repurchase authorization. The share repurchase authorization has no set expiration or termination date. Share Repurchases For the year ended December 31, 2016 , the Company repurchased 7.4 million shares of its common stock for $590 million , which includes 3.1 million shares repurchased under an accelerated share repurchase agreement ("ASR") as follows: In May 2016, the Company entered into an ASR with a financial institution to repurchase $250 million of the Company's common stock as part of the Company's share repurchase program. The 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 repurchase period, less a fixed discount. Under the ASR, the Company paid $250 million to the financial institution and received 3.1 million shares of common stock, resulting in a final price per share of $81.04 . The Company initially received 2.8 million shares of its common stock during the second quarter of 2016 and received an additional 0.3 million shares upon completion of the ASR during the third quarter of 2016. For the year ended December 31, 2015 , the Company repurchased 3.2 million shares of its common stock for $224 million . For the year ended December 31, 2014 , the Company repurchased 2.2 million shares of its common stock for $132 million . Shares Reissued from Treasury Stock For the years ended December 31, 2016 , 2015 and 2014 the Company reissued 2 million shares, 1 million shares and 2 million shares, respectively, for employee benefit plans. Redeemable Noncontrolling Interest On July 1, 2015, UMass Memorial Medical Center ("UMass") acquired an 18.9% noncontrolling interest in a subsidiary of the Company that performs diagnostic information services in a defined territory within the state of Massachusetts. In connection with the transaction, the Company received consideration of $68 million . Under the terms of the transaction, UMass has the right to require the Company to purchase all of its interest in the subsidiary at fair value commencing July 1, 2020. Since the redemption of the noncontrolling interest is outside of the Company's control, it has been presented outside of stockholders' equity at the greater of its carrying amount or its fair value. The Company will record changes in the fair value of the noncontrolling interest immediately as they occur. As of December 31, 2016 and 2015 , the redeemable noncontrolling interest was $77 million and $70 million , respectively, and was presented at its fair value. |
STOCK OWNERSHIP AND COMPENSATIO
STOCK OWNERSHIP AND COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2016 | |
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 the Company's prior plan. 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. 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 stock options and shares are subject to forfeiture if employment terminates prior to the end of the vesting period prescribed by the Board of Directors. For all award types, the vesting period is generally over three years from the date of grant. For performance share unit awards, the actual amount of shares earned is based on the achievement of the performance goals specified in the awards. The maximum number of shares of Company common stock that may be optioned or granted under the ELTIP is approximately 71 million shares. In 2005, the Company established the DLTIP to replace the Company's prior plan. 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, 2016 , 2015 and 2014 , grants under the DLTIP totaled 21 thousand shares, 31 thousand shares and 32 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. Beginning in 2015, the Company changed its method for estimating the fair value of its stock option awards from a lattice-based option-valuation method to a Black-Scholes option-valuation model which has been applied prospectively to stock option awards. The change did not have a significant effect on the stock-based compensation expense reported in the consolidated statements of operations for the years ended December 31, 2016 and 2015, because stock option awards are granted based on a prescribed dollar value. The expected volatility under the Black-Scholes option-valuation model was based on historical volatilities 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 was based on the U.S. Treasury yield curve in effect at the time of grant for bonds with maturities consistent with the expected holding period of the related award. The expected holding period was estimated using the historical exercise behavior of employees. The weighted average assumptions used in valuing stock options granted in the periods presented were: 2016 2015 2014 Fair value at grant date $10.35 $11.57 $10.99 Expected volatility 21.6% 21.0% 25.1% Dividend yield 2.4% 2.1% 2.1% Risk-free interest rate 1.4% 1.7% 1.6% - 2.0% Expected holding period, in years 5.3 5.3 5.5 - 6.6 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. The following summarizes the activity relative to stock option awards for 2016 : Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Options outstanding, beginning of year 7.7 $ 59.65 Options granted 2.8 66.87 Options exercised (1.3 ) 56.17 Options forfeited and canceled (0.1 ) 66.53 Options outstanding, end of year 9.1 $ 62.27 7.2 $ 269 Exercisable, end of year 4.2 $ 57.84 5.7 $ 144 Vested and expected to vest, end of year 8.8 $ 62.10 7.2 $ 262 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 2016 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, 2016 . This amount changes based on the fair market value of the Company's common stock. Total intrinsic value of options exercised in 2016 , 2015 and 2014 was $30 million , $21 million and $13 million , respectively. As of December 31, 2016 , there was $16 million of unrecognized stock-based compensation cost related to nonvested stock options which is expected to be recognized over a weighted average period of 1.9 years. The following summarizes the activity relative to stock awards, including restricted stock awards, restricted stock units and performance share units, for 2016 , 2015 and 2014 : 2016 2015 2014 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares outstanding, beginning of year 1.7 $ 59.92 1.9 $ 55.50 1.9 $ 57.08 Shares granted 0.6 67.26 0.6 71.17 0.7 52.72 Shares vested (0.4 ) 58.98 (0.3 ) 55.74 (0.3 ) 57.14 Shares forfeited and canceled (0.4 ) 57.31 (0.5 ) 58.18 (0.4 ) 56.44 Shares outstanding, end of year 1.5 $ 63.88 1.7 $ 59.92 1.9 $ 55.50 As of December 31, 2016 , there was $33 million of unrecognized stock-based compensation cost related to nonvested stock awards, which is expected to be recognized over a weighted average period of 1.9 years. Total fair value of shares vested was $28 million , $20 million and $17 million for the years ended December 31, 2016 , 2015 and 2014 , 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, 2016 , 2015 and 2014 , stock-based compensation expense totaled $69 million , $52 million and $51 million , respectively. Income tax benefits related to stock-based compensation expense totaled $32 million , $20 million and $20 million for the years ended December 31, 2016 , 2015 and 2014 , 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 9 million . Approximately 332 thousand , 349 thousand and 392 thousand shares of common stock were purchased by eligible employees in 2016 , 2015 and 2014 , 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 $76 million , $77 million and $73 million for 2016 , 2015 and 2014 , 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 $51 million and $49 million as of December 31, 2016 and 2015 , respectively. Although the Company is currently contributing all participant deferrals and matching amounts to trusts, the funds in these trusts, totaling $51 million and $49 million as of December 31, 2016 and 2015 , 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 $39 million and $36 million as of December 31, 2016 and 2015 , 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 $32 million and $29 million as of December 31, 2016 and 2015 , respectively. For the years ended December 31, 2016 , 2015 and 2014 , the Company's expense for matching contributions to these plans were not material. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Letters of Credit and Contractual Obligations The Company can issue letters of credit under its Secured Receivables Credit Facility and 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, $68 million in letters of credit under the Secured Receivables Credit Facility were outstanding as of December 31, 2016 . 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 as of December 31, 2016 are as follows: Year Ending December 31, 2017 $ 179 2018 129 2019 92 2020 64 2021 44 Thereafter 153 Minimum lease payments $ 661 Operating lease rental expense for 2016 , 2015 and 2014 totaled $216 million , $224 million and $242 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, primarily under take-or-pay arrangements, 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. As of December 31, 2016 , the approximate total future purchase commitments are $111 million , of which $66 million are expected to be incurred in 2017 , $21 million are expected to be incurred in 2018 through 2019 and the balance thereafter. Billing and Collection Agreement In September 2016, the Company entered into a ten year agreement with a third party to outsource its billing and related operations for the majority of the Company’s revenues. Services under the agreement commenced during the fourth quarter of 2016. The agreement includes an annual fee, which is subject to adjustment based on certain changes in the Company's requisition volume and the achievement of various performance metrics. Contingent Lease Obligations The Company remains subject to contingent obligations under certain real estate leases, including 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 certain 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 up to 31 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, in certain cases, 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. Agreement in Principle In April 2015, a qui tam civil lawsuit entitled United States ex rel. Mayes v. Berkeley HeartLab, Inc. , et al., filed in the U.S. District Court for the District of South Carolina, was unsealed. The complaint alleges that certain alleged business practices of the defendants violate the False Claims Act, and seeks monetary relief. The United States has intervened as a plaintiff as to Berkeley HeartLab, Inc., a subsidiary of the Company and filed a complaint in intervention; the United States did not intervene as a plaintiff as to Quest Diagnostics Incorporated. The parties have reached an agreement in principle to resolve these matters, subject to further negotiation of terms and conditions and governmental sign-offs. In order to most efficiently and effectively finalize the settlement agreement, the parties have agreed to stay the filing of certain pleadings and their respective discovery requests associated with 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 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's motion to dismiss the state's amended complaint was denied. The Company filed a motion for summary judgment on the primary claim in the case; the motion was granted. The court found that the Company had properly billed the Medicaid program the Company’s “usual and customary charge.” 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, 2016 , the Company does not believe that any material 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 for which an accrual has not been recorded, 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 $5 million and $9 million as of December 31, 2016 and 2015 , 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 $117 million and $124 million as of December 31, 2016 and 2015 , 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, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISPOSITIONS AND HELD FOR SALE Sale of Focus Diagnostics Products On March 29, 2016, the Company entered into a definitive agreement to sell the assets of its non-core Focus Diagnostics products business ("Focus Diagnostics") to DiaSorin S.p.A. ("DiaSorin"). On May 13, 2016, the Company completed the sale of Focus Diagnostics for $300 million in cash, or $293 million net of transaction costs and working capital adjustments, which includes $25 million of proceeds held in escrow. For the year ended December 31, 2016, the Company recorded a $118 million pre-tax gain on disposition of business. The Company also recorded income tax expense of $84 million , consisting of $91 million of current income tax expense (all of which was paid in 2016) and a deferred income tax benefit of $7 million . The income tax expense resulted in an effective tax rate of 71.4% , which was significantly in excess of the statutory tax rate primarily due to a lower tax basis in the assets sold, specifically the goodwill associated with the disposition. The assets disposed of consisted of $113 million of goodwill, $30 million of intangible assets, with the remaining $38 million consisting of accounts receivable, inventories and property, plant and equipment. In addition, the disposition included liabilities of $6 million . As of December 31, 2015, the assets to be disposed of as part of the transaction primarily consisted of $113 million of goodwill, with the remainder consisting of property, plant and equipment, inventories and intangible assets, which were classified and included in current assets held for sale. In connection with the sale, the Company entered into a five year supply agreement with DiaSorin. The supply agreement, which does not include a minimum purchase commitment, enables the Company to purchase certain products and supplies used in its DIS business. Purchases by the Company under this supply agreement subsequent to the sale of Focus Diagnostics were not material. Focus Diagnostics, prior to May 13, 2016, was included in all other operating segments and has not been classified as a discontinued operation. For further details regarding business segment information, see Note 19. Contribution of Clinical Trials Business On March 30, 2015, the Company entered into a definitive agreement with Quintiles Transnational Holdings, Inc. (now know as Quintiles IMS Holdings, Inc.) to form a global clinical trials central laboratory services joint venture, Q 2 Solutions. The transaction closed on July 1, 2015. In connection with the transaction, the Company contributed certain assets of its clinical trials testing business ("Clinical Trials") and $33 million of cash to the newly formed joint venture in exchange for a non-controlling, 40% ownership interest. The assets of Clinical Trials contributed to the joint venture, principally consisting of property, plant and equipment and goodwill, were classified as assets held for sale in the first quarter of 2015 and were contributed to Q 2 Solutions upon closing of the transaction. Subsequent to closing, the Company's ownership interest in the joint venture is being accounted for under the equity method of accounting. As of December 31, 2016 and 2015, the investment in Q 2 Solutions had a carrying value of $389 million and $416 million , respectively. During the third quarter of 2015, the Company recognized a pre-tax gain of $334 million based on the difference between the fair value of the Company's equity interest in the newly formed joint venture over the carrying value of the assets contributed. The fair value of the Company's equity interest was determined using discounted cash flows. The most significant assumptions used in the valuation include a discount rate ( 12% ), a long-term growth rate ( 2.5% ) and EBITDA margins. In connection with the gain, the Company recorded a deferred income tax liability of $145 million . Upon formation, the Company's investment in Q 2 Solutions exceeded its equity in the underlying net assets by approximately $219 million . This basis difference is attributable to finite-lived assets, indefinite-lived intangible assets and goodwill of the joint venture. The basis difference associated with the finite-lived assets of $75 million is being amortized over a weighted average useful life of 8 years as a reduction to the carrying value of the investment in equity method investees and corresponding reduction in equity in earnings of equity method investees, net of taxes. Q 2 Solutions is considered a related party to the Company due to the Company's non-controlling ownership interest in Q 2 Solutions and the Company's continuing involvement in providing diagnostic information services on an ongoing basis. In addition, the Company provides transition services to Q 2 Solutions for a limited period of time. For further details regarding related parties, see Note 20. Clinical Trials, prior to July 1, 2015, was included in all other operating segments and has not been classified as discontinued operations. For further details regarding business segment information, see Note 19. DISCONTINUED OPERATIONS During the third quarter of 2006, the Company completed its wind down of NID and classified the operations of NID as discontinued operations. The Company will continue to report NID as a discontinued operation until uncertain tax benefits associated with NID are resolved. The results of operations for NID have been classified as discontinued operations for all periods presented. Summarized financial information for the discontinued operations is set forth below: 2016 2015 2014 Net revenues $ — $ — $ — Income from discontinued operations before taxes — — 1 Income tax benefit — — (4 ) Income from discontinued operations, net of taxes $ — $ — $ 5 The remaining balance sheet information related to NID was not material as of December 31, 2016 and 2015 . |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The Company's DIS business provides insights through clinical testing and related services to a broad range of customers, including patients, clinicians, hospitals, IDNs, health plans, employers and ACOs. The Company is the world's leading provider of diagnostic information services, which includes providing clinical testing services such as routine (including drugs-of-abuse) testing, gene-based and esoteric (including advanced diagnostics) testing, and anatomic pathology services, as well as related services and insights. The DIS business accounted for greater than 90% of net revenues from continuing operations in 2016 , 2015 and 2014 . All other operating segments include the Company's DS businesses, which consists of its risk assessment services, healthcare information technology, diagnostic products (prior to May 13, 2016), and clinical trials testing (prior to July 1, 2015) businesses. The Company's DS businesses offer a variety of solutions for life insurers, healthcare providers and others. In addition to the sale of Focus Diagnostics (see Note 6) in 2016, the Company wound down its Celera products business, which did not have a material impact on the Company's consolidated financial statements. As a result of these transactions, the Company has disposed of its diagnostics products business. During 2016, 2015 and 2014, the Company acquired certain operations of CLP, certain operations of MemorialCare, Superior Mobile Medics, Solstas, Summit Health and certain operations of Steward (see Note 5). CLP, MemorialCare, Solstas, Summit Health and Steward are included in the Company's DIS business. Superior Mobile Medics is included in all other operating segments. On April 19, 2006, the Company decided to discontinue NID’s operations. The results of operations for NID have been classified as discontinued operations for all periods presented (see Note 18). As of December 31, 2016 , substantially all of the Company’s services were provided within the United States, and substantially all of the Company’s assets were located within the United States. The following table is a summary of segment information for the years ended December 31, 2016 , 2015 and 2014 . 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 (loss) for the segment. General corporate activities included in the table below are comprised of general management and administrative corporate expenses, amortization and impairment of intangibles assets, other operating income and expenses net of certain general corporate activity costs that are allocated to the DIS and DS businesses, and the gains on disposition of businesses associated with the dispositions of Focus Diagnostics and Clinical Trials (see Note 6) . The accounting policies of the segments are the same as those of the Company as set forth in Note 2. 2016 2015 2014 Net revenues: DIS business $ 7,138 $ 6,965 $ 6,873 All other operating segments 377 528 562 Total net revenues $ 7,515 $ 7,493 $ 7,435 Operating earnings (loss): DIS business $ 1,244 $ 1,118 $ 1,068 All other operating segments 64 110 94 General corporate activities (31 ) 171 (179 ) Total operating income 1,277 1,399 983 Non-operating expenses, net (191 ) (296 ) (160 ) Income from continuing operations before income taxes and equity in earnings of equity method investees 1,086 1,103 823 Income tax expense (429 ) (373 ) (262 ) Equity in earnings of equity method investees, net of taxes 39 23 26 Income from continuing operations 696 753 587 Income from discontinued operations, net of taxes — — 5 Net income 696 753 592 Less: Net income attributable to noncontrolling interests 51 44 36 Net income attributable to Quest Diagnostics $ 645 $ 709 $ 556 Depreciation and amortization expense for the years ended December 31, 2016 , 2015 and 2014 were as follows: 2016 2015 2014 DIS business $ 170 $ 212 $ 206 All other operating segments 6 10 13 General corporate 73 82 95 Total depreciation and amortization $ 249 $ 304 $ 314 Capital expenditures for the years ended December 31, 2016 , 2015 and 2014 were as follows: 2016 2015 2014 DIS business $ 264 $ 243 $ 283 All other operating segments 21 16 17 General corporate 8 4 8 Total capital expenditures $ 293 $ 263 $ 308 Net revenues by major service for the years ended December 31, 2016 , 2015 and 2014 were as follows: 2016 2015 2014 Routine clinical testing services $ 4,179 $ 4,078 $ 4,066 Gene-based and esoteric (including advanced diagnostics) testing services 2,335 2,256 2,158 Anatomic pathology testing services 624 631 649 All other 377 528 562 Total net revenues $ 7,515 $ 7,493 $ 7,435 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | RELATED PARTIES The Company's equity method investees primarily consist of its clinical trials central laboratory services joint venture and its diagnostic information services joint ventures, which are accounted for under the equity method of accounting. During the years ended December 31, 2016 and 2015, the Company recognized net revenues of $33 million and $30 million , respectively, associated with diagnostic information services provided to its equity method investees. As of December 31, 2016 and 2015, there was $10 million and $5 million , respectively, of accounts receivable from equity method investees related to such services. During the years ended December 31, 2016 and 2015, the Company recognized income of $19 million and $31 million , respectively, associated with the performance of certain corporate services, including transition services, for its equity method investees, classified within selling, general and administrative expenses. As of December 31, 2016 and 2015, there was $5 million and $32 million , respectively, of other receivables from equity method investees included in prepaid expenses and other current assets related to these service agreements and other transition related items. In addition, accounts payable and accrued expenses as of both December 31, 2016 and 2015 included $9 million due to equity method investees. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS In February 2017, the Company entered into a definitive agreement to acquire the outreach laboratory services operations of PeaceHealth Laboratories ("PeaceHealth"). PeaceHealth delivers laboratory services in Oregon, Washington and Alaska. Closing of the transaction, which is expected in the second quarter of 2017, is subject to customary regulatory review and customary closing conditions. In February 2017 , the Company developed high-level estimates of the pre-tax charges expected to be incurred in connection with the course of action for 2017 under the Invigorate program. For further details regarding the Invigorate program, see Note 4. |
Quarterly Operating Results (un
Quarterly Operating Results (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Quarterly Operating Results (unaudited) | 2016 (a) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (b) (c) (d) (e) Net revenues $ 1,863 $ 1,906 $ 1,885 $ 1,861 $ 7,515 Gross profit 719 751 728 701 2,899 Income from continuing operations 115 209 205 167 696 Income from discontinued operations, net of taxes — — — — — Net income 115 209 205 167 696 Less: Net income attributable to noncontrolling interests 12 14 13 12 51 Net income attributable to Quest Diagnostics $ 103 $ 195 $ 192 $ 155 $ 645 Amounts attributable to Quest Diagnostics' stockholders: Income from continuing operations $ 103 $ 195 $ 192 $ 155 $ 645 Income from discontinued operations, net of taxes — — — — — Net income $ 103 $ 195 $ 192 $ 155 $ 645 Earnings per share attributable to Quest Diagnostics' stockholders - basic: Income from continuing operations $ 0.72 $ 1.38 $ 1.37 $ 1.11 $ 4.58 Income from discontinued operations — — — — — Net income $ 0.72 $ 1.38 $ 1.37 $ 1.11 $ 4.58 Earnings per share attributable to Quest Diagnostics' stockholders - diluted: Income from continuing operations $ 0.71 $ 1.37 $ 1.34 $ 1.09 $ 4.51 Income from discontinued operations — — — — — Net income $ 0.71 $ 1.37 $ 1.34 $ 1.09 $ 4.51 2015 (a) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (f) (g) (h) (i) Net revenues $ 1,839 $ 1,925 $ 1,880 $ 1,849 $ 7,493 Gross profit 676 743 718 699 2,836 Income from continuing operations 70 129 354 200 753 Income from discontinued operations, net of taxes — — — — — Net income 70 129 354 200 753 Less: Net income attributable to noncontrolling interests 9 11 12 12 44 Net income attributable to Quest Diagnostics $ 61 $ 118 $ 342 $ 188 $ 709 Amounts attributable to Quest Diagnostics' stockholders: Income from continuing operations $ 61 $ 118 $ 342 $ 188 $ 709 Income from discontinued operations, net of taxes — — — — — Net income $ 61 $ 118 $ 342 $ 188 $ 709 Earnings per share attributable to Quest Diagnostics' stockholders - basic: Income from continuing operations $ 0.42 $ 0.82 $ 2.37 $ 1.31 $ 4.92 Income from discontinued operations — — — — — Net income $ 0.42 $ 0.82 $ 2.37 $ 1.31 $ 4.92 Earnings per share attributable to Quest Diagnostics' stockholders - diluted: Income from continuing operations $ 0.42 $ 0.81 $ 2.35 $ 1.29 $ 4.87 Income from discontinued operations — — — — — Net income $ 0.42 $ 0.81 $ 2.35 $ 1.29 $ 4.87 (a) 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 NID as discontinued operations for all periods presented (see Note 18). In May 2016, the Company completed the sale of Focus Diagnostics (see Note 6). In July 2015, the Company contributed its clinical trials testing business to a newly formed global clinical trials central laboratory services joint venture, Q 2 Solutions (see Note 6). Subsequent to the contribution, the Company's ownership interest in the joint venture is being accounted for under the equity method of accounting. (b) Included pre-tax charges of $21 million , primarily associated with systems conversions and integration costs incurred in connection with further restructuring and integrating the Company ( $7 million in cost of services, $12 million in selling, general and administrative expenses and $2 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $1 million in other operating (income) expense, net, representing non-cash asset impairment charges; pre-tax charges in selling, general and administrative expenses of $2 million , primarily representing costs incurred related to certain legal matters; pre-tax charges of $48 million on retirement of debt associated with the March 2016 cash tender offer in other (expense) income, net (see Note 13); and pre-tax charges of $1 million representing non-cash asset impairment charges associated with an investment. (c) Included a pre-tax gain of $118 million associated with the sales of the Focus Diagnostics; pre-tax charges of $19 million , primarily associated with systems conversions and integration costs incurred in connection with further restructuring and integrating the Company ( $10 million in cost of services, $8 million in selling, general and administrative expenses and $1 million in equity in earnings of equity method investees, net of taxes); pre-tax charges in selling, general and administrative expenses of $1 million , primarily representing costs incurred related to certain legal matters; and pre-tax charges of $6 million representing non-cash asset impairment charges associated with certain investments in other (expense) income, net. (d) Included pre-tax charges of $18 million , primarily associated with systems conversions and integration costs incurred in connection with further restructuring and integrating the Company ( $8 million in cost of services and $10 million in selling, general and administrative expenses); and pre-tax gain of $21 million , principally a result of a gain on escrow recovery associated with an acquisition in other operating (income) expense, net. (e) Included pre-tax charges of $24 million , primarily associated with systems conversions and integration costs incurred in connection with further restructuring and integrating the Company ( $15 million in cost of services, $7 million in selling, general and administrative expenses, $1 million in other operating (income) expense, net and $1 million in equity in earnings of equity method investees, net of taxes); and pre-tax charges of $6 million in other operating (income) expense, net, representing non-cash asset impairment charges. (f) Included pre-tax charges of $31 million , primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company ( $20 million in cost of services and $11 million in selling, general and administrative expenses); pre-tax charges of $8 million in other operating (income) expense, net, representing non-cash asset impairment charges associated with our Celera products business; pre-tax charges in selling, general and administrative expenses of $2 million , principally representing costs incurred related to certain legal matters; and pre-tax charges of $79 million on retirement of debt associated with the March 2015 cash tender offer in other (expense) income, net (see Note 13). (g) Included pre-tax charges of $23 million , primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company ( $11 million in cost of services and $12 million in selling, general and administrative expenses); a pre-tax gain included in other operating (income) expense, net of $13 million associated with a decrease in the fair value of the contingent consideration accrual associated with our Summit Health acquisition (see Note 5 and Note 7); pre-tax charges in selling, general and administrative expenses of $5 million , principally representing costs incurred related to certain legal matters; pre-tax charges of $5 million in other operating (income) expense, net, representing non-cash asset impairment charges; and pre-tax charges of $65 million on retirement of debt associated with the April 2015 redemption in other (expense) income, net (see Note 13). (h) Included a pre-tax gain of $334 million associated with the contribution of the Company's clinical trials testing business to Q 2 Solutions (see Note 6); and pre-tax charges of $34 million , primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company ( $20 million in cost of services, $9 million in selling, general and administrative expenses and $5 million equity in earnings of equity method investees, net of taxes). (i) Included pre-tax charges of $22 million , primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company ( $12 million in cost of services and $10 million in selling, general and administrative expenses); pre-tax charges of $11 million in other operating (income) expense, net, representing non-cash asset impairment charges associated with winding down a subsidiary; and pre-tax charges in selling, general and administrative expenses of $10 million , principally representing costs incurred related to certain legal matters. Income from continuing operations includes a deferred income tax benefit of $58 million associated with winding down a subsidiary. |
Schedule II - Valuation Account
Schedule II - Valuation Accounts and Reserves | 12 Months Ended |
Dec. 31, 2016 | |
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 Beginning of Year Provision for Doubtful Accounts Net Deductions and Other Balance at End of Year Year Ended December 31, 2016 Doubtful accounts and allowances $ 254 $ 308 $ 297 (a) $ 265 Year Ended December 31, 2015 Doubtful accounts and allowances $ 250 $ 297 $ 293 (a) $ 254 Year Ended December 31, 2014 Doubtful accounts and allowances $ 236 $ 296 $ 282 (a) $ 250 (a) Primarily represents the write-off of accounts receivable, net of recoveries. |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | During the third quarter of 2006, the Company completed the wind-down of NID, a test kit manufacturing subsidiary. The accompanying consolidated statements of operations and related disclosures report the results of NID as discontinued operations for all periods presented. See Note 18 for a further discussion of discontinued operations. 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 did not have any VIEs as of both December 31, 2016 and 2015 . All significant intercompany accounts and transactions are eliminated in consolidation. |
Equity Method Investments | 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. These investments are classified as investments in equity method investees in the consolidated balance sheets. The Company records its pro rata share of the earnings, adjusted for accretion of basis difference, of these investments in equity in earnings of equity method investees, net of taxes in the consolidated statements of operations. The Company reviews its investments in equity method investees for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. |
Reclassifications | As a result of the early adoption of the accounting standard update ("ASU") associated with simplifying several aspects of stock-based compensation, certain reclassifications have been made to the prior period financial statements to conform with the current period presentation. For further details regarding the impact of the ASU, see New Accounting Standards |
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% of the Company's consolidated net revenues for each of the years ended December 31, 2016 , 2015 and 2014 . 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. Revenues from the Company's risk assessment services, healthcare information technology, clinical trials testing (see Note 6 regarding the contribution of the clinical trials testing business to a newly formed joint venture effective July 1, 2015), and diagnostics products businesses (see Note 6 regarding the sale of the Focus Diagnostics products business on May 13, 2016) 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 awards 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. For further details regarding stock-based compensation, see Note 16. |
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 operating 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 the average monthly exchange rates during the year. Resulting translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity. Gains and losses from foreign currency transactions, which are denominated in a currency other than the functional currency, 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. The Company's 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. As of December 31, 2016 and 2015 , receivables due from government payers under the Medicare and Medicaid programs represent approximately 15% and 16% , 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. As of both December 31, 2016 and 2015 , receivables due from patients represent approximately 17% 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 in the consolidated statements of operations. 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 of December 31, 2016 as follows: • buildings and improvements, ranging up to thirty-one and a half years; • laboratory equipment and furniture and fixtures, ranging from five to twelve 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, five years. In connection with the Company’s annual review of the estimated useful lives of its property, plant and equipment completed during the first quarter of 2016, the Company revised the estimated useful lives of certain classes of its property, plant and equipment. In order to better reflect the Company's current expectations regarding the use of its assets, the recent operational improvements from its Invigorate program and considering historical and other data, the Company revised the estimated useful lives of its laboratory equipment from a range of five to seven years to a range of seven to ten years, furniture and fixtures from a range of three to seven years to a range of five to twelve years and computer software obtained for internal use from three years to five years. The change in estimated useful lives was accounted for prospectively as a change in accounting estimate effective in the first quarter of 2016. The impact of this change for the year ended December 31, 2016, was a decrease in depreciation expense and an increase in operating income of $37 million and an increase in net income of $23 million , or $0.16 per share on a basic and diluted basis. |
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 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. If, after assessing the totality of events or circumstances, the Company determines that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value, then it is required to perform the first step of the two-step goodwill impairment test. Otherwise, no further analysis is required. 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 either a discounted cash flows analysis that converts future cash flow amounts into a single discounted present value amount or a market approach. The Company assesses the valuation methodology based upon the relevance and availability of the data at the time it performs the valuation. As part of the first step to assess potential impairment, management compares the estimate of fair value for the reporting unit to the carrying value of the reporting unit. If the carrying 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 and record any noted impairment loss. The Company performs its annual impairment test during the fourth quarter of the fiscal year ended December 31st. For the years ended December 31, 2016 and 2015 , the Company performed the qualitative assessment for its DIS and risk assessment services reporting units. Based on the totality of information available for the DIS and risk assessment services reporting units, the Company concluded that it was more-likely-than-not that the estimated fair values were greater than the carrying values of the reporting units, and as such, no further analysis was required. For the year ended December 31, 2015 , the Company performed step one of the goodwill impairment test for its diagnostic products reporting unit, which was disposed of in 2016 as a result of the sale of the Focus Diagnostics products business (see Note 6), and concluded that goodwill of the reporting unit was not impaired. |
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. 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 tests completed during the fourth quarter of the years ended December 31, 2016 and 2015 , 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's investments, which are included in other assets in the consolidated balance sheets, are comprised of trading securities, available-for-sale securities and other investments. The classification of an investment depends on our intent and ability to hold the investment. • Trading 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). Trading securities are carried at fair value with both realized and unrealized gains and losses recorded currently in earnings as a component of non-operating expenses within other (expense) income, net in the consolidated statements of operations. For the years ended December 31, 2016 , 2015 and 2014 , gains from trading equity securities totaled $3 million , $0 million , and $3 million , respectively. • Available-for-sale equity securities consists of an investment in registered shares of a public corporation. Available-for-sale equity securities are carried at fair value with unrealized gains and losses, net of tax, recorded as a component of accumulated other comprehensive loss within stockholders' equity and realized gains and losses recorded in other (expense) income, net in the consolidated statements of operations. As of December 31, 2016 , the Company had gross unrealized losses from available-for-sale equity securities of $5 million . • 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. 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 as of December 31, 2016 and 2015 consisted of the following: 2016 2015 Available-for-sale equity securities $ 3 $ 6 Trading equity securities 51 49 Other investments 6 8 Total $ 60 $ 63 |
Derivative Financial Instruments | 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, interest rate 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 May 2014, the Financial Accounting Standards Board ("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. In August 2015, the FASB deferred the effective date of this ASU to the first quarter of 2018, with early adoption permitted beginning in the first quarter of 2017. The ASU can be applied using a full retrospective method or a modified retrospective method of adoption. The Company expects to adopt the ASU in the first quarter of 2018 using the full retrospective method and continues to assess the impact of this ASU on its results of operations, financial position and cash flows. Based on its preliminary assessment, the Company expects the majority of the amounts that have historically been classified as bad debt expense, primarily related to patient responsibility, will be reflected as a reduction of the transaction price and therefore as a reduction in revenue. The adoption of this ASU is not expected to have a material impact on the Company's financial position or cash flows. In January 2016, the FASB issued an ASU on the recognition and measurement of financial assets and financial liabilities. This ASU requires that all equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) be measured at fair value with changes in fair value recognized in net income. However, companies may elect to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. In addition, the ASU eliminates the requirement to disclose the method and significant assumptions used to estimate the fair value for financial instruments measured at amortized cost on the balance sheet. The ASU is effective for the Company in the first quarter of 2018. The Company does not expect the adoption of this ASU to have a material impact on its results of operations, financial position and cash flows. In February 2016, the FASB issued an ASU that amends accounting for leases. Under the new guidance, a lessee will recognize assets and liabilities for most leases on its balance sheet but will recognize expense on its statement of operations similar to current lease accounting. The ASU is effective for the Company in the first quarter of 2019 with early adoption permitted. The new guidance must be adopted using a modified retrospective transition approach, and provides for certain practical expedients. The adoption of this ASU will result in a significant increase to the Company’s balance sheet for lease liabilities and right-of-use assets, which has not yet been quantified. The Company is currently evaluating this and the other effects of adoption of this ASU on its consolidated financial statements. In March 2016, the FASB issued an ASU that simplifies the transition to the equity method of accounting by requiring adoption as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence, no retroactive adjustment of the investment is required. The ASU is effective for the Company in the first quarter of 2017 with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its results of operations, financial position and cash flows. In March 2016, the FASB issued an ASU that simplifies several aspects of the accounting for stock-based compensation award transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and accounting for forfeitures. In the second quarter of 2016, the Company elected to early adopt this standard, effective January 1, 2016. As a result: • Excess income tax benefits and deficiencies from stock-based compensation arrangements are recognized as a discrete item within income tax expense, rather than additional paid-in capital. The adoption of this provision, which was done on a prospective basis, resulted in the classification of $9 million of tax benefits in income tax expense for the year ended December 31, 2016. In addition, excess income tax benefits and deficiencies are no longer considered when applying the treasury stock method for computing the effect of dilutive securities, which resulted in an increase in the effect of the dilutive securities for the year ended December 31, 2016. • Excess income tax benefits from stock-based compensation arrangements are classified as an operating activity and cash paid for employee payroll tax withholdings by directly withholding shares are classified as a financing activity in the consolidated statements of cash flows. The adoption of these provisions, which was done on a retrospective basis, resulted in the reclassification of: ◦ $5 million and $0 million of excess tax benefits related to the settlement of stock-based compensation awards from financing to operating activities for the year ended December 31, 2015 and 2014, respectively; and ◦ $7 million and $6 million of taxes paid related to employee payroll tax withholdings on stock issued under stock-based compensation plans from operating to financing activities for the years ended December 31, 2015 and 2014, respectively. In addition, the ASU permits the Company to make a policy election to either estimate the forfeitures expected to occur in order to determine the amount of compensation cost to be recognized in each period or to account for forfeitures in the period they occur. The Company elected to continue to estimate the forfeitures expected to occur in order to determine the amount of compensation cost to be recognized in each period. In June 2016, the FASB issued an ASU that changes the impairment model for most financial instruments, including trade receivables from an incurred loss method to a new forward-looking approach, based on expected losses. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU is effective for the Company in the first quarter of 2020 and must be adopted using a modified retrospective transition approach. 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. In August 2016, the FASB issued an ASU that clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for the Company in the first quarter of 2018 with early adoption permitted and must be applied retrospectively to all periods presented. Upon adoption cash payments for debt retirement costs would be reclassified from operating cash outflows to financing cash outflows in the statement of cash flows. I n November 2016, the FASB issued an ASU that clarifies the presentation and classification of restricted cash in the statement of cash flows. The ASU requires that amounts generally described as restricted cash and restricted cash equivalents be presented with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The ASU is effective for the Company in the first quarter of 2018 with early adoption permitted and must be applied retrospectively to all periods presented. The Company does not expect the adoption of this ASU to have a material impact on its cash flows. In January 2017, the FASB issued an ASU that provides guidance on evaluating when a set of transferred assets and activities (set) is a business. If an entity determines that substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the set is not a business. If this threshold is not met, then the entity needs to evaluate whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The ASU is effective for the Company in the first quarter of 2018 with early adoption permitted. 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. In January 2017, the FASB issued an ASU that simplifies the quantitative test for goodwill impairment. The guidance eliminates step two in the current two-step process so that any goodwill impairment is measured as the amount by which the reporting unit’s carrying amount exceeds its fair value. The ASU is effective for the Company in the first quarter of 2020 with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its results of operations, financial position and cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Investments | Investments as of December 31, 2016 and 2015 consisted of the following: 2016 2015 Available-for-sale equity securities $ 3 $ 6 Trading equity securities 51 49 Other investments 6 8 Total $ 60 $ 63 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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): 2016 2015 2014 Amounts attributable to Quest Diagnostics’ stockholders: Income from continuing operations $ 645 $ 709 $ 551 Income from discontinued operations, net of taxes — — 5 Net income attributable to Quest Diagnostics’ common stockholders $ 645 $ 709 $ 556 Income from continuing operations $ 645 $ 709 $ 551 Less: Earnings allocated to participating securities 3 3 2 Earnings available to Quest Diagnostics’ common stockholders – basic and diluted $ 642 $ 706 $ 549 Weighted average common shares outstanding – basic 140 144 145 Effect of dilutive securities: Stock options and performance share units 2 1 — Weighted average common shares outstanding – diluted 142 145 145 Earnings per share attributable to Quest Diagnostics’ common stockholders – basic: Income from continuing operations $ 4.58 $ 4.92 $ 3.80 Income from discontinued operations — — 0.03 Net income $ 4.58 $ 4.92 $ 3.83 Earnings per share attributable to Quest Diagnostics’ common stockholders – diluted: Income from continuing operations $ 4.51 $ 4.87 $ 3.78 Income from discontinued operations — — 0.03 Net income $ 4.51 $ 4.87 $ 3.81 |
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: 2016 2015 2014 Stock options and performance share units 1 2 2 |
RESTRUCTURING ACTIVITIES (Table
RESTRUCTURING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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: 2016 2015 2014 Employee separation costs $ 9 $ 38 $ 31 Facility-related costs 2 1 12 Asset impairment charges — — 1 Total restructuring charges $ 11 $ 39 $ 44 |
Schedule of Activity of Restructuring Liability | The following table summarizes the activity of the restructuring liability as of December 31, 2016 and 2015 , which is included in accrued expenses in Note 12: Employee Separation Costs Facility-Related Costs Total Balance, December 31, 2014 $ 18 $ 11 $ 29 Income statement expense 38 1 39 Cash payments (40 ) (6 ) (46 ) Other / adjustments — (3 ) (3 ) Balance, December 31, 2015 16 3 19 Income statement expense 9 2 11 Cash payments (19 ) (2 ) (21 ) Balance, December 31, 2016 $ 6 $ 3 $ 9 |
BUSINESS ACQUISITIONS (Tables)
BUSINESS ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The following tables summarize the total consideration and the amounts of assets acquired and liabilities assumed for Solstas Lab Partners Group and Summit Health, Inc. acquisitions, which are further discussed below: 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 Fair Value Weighted Average Useful Life (in years) Fair Value Weighted Average Useful Life (in years) Allocation of purchase price: Cash and cash equivalents $ 9 $ 1 Accounts receivable, net 48 9 Other current assets 12 16 Property, plant and equipment, net 49 6 Goodwill 271 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 48 — Total assets acquired 647 162 Current liabilities 64 10 Non-current deferred income taxes 3 — Other non-current liabilities 8 — Total liabilities assumed 75 10 Net assets acquired $ 572 $ 152 |
Schedule of Pro Forma Information | Pre-acquisition financial information for all other acquisitions has not been included in the table below as these acquisitions were not material to the Company’s consolidated financial statements. 2014 (unaudited) Pro forma net revenues $ 7,520 Pro forma income from continuing operations $ 585 Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: Pro forma income from continuing operations $ 3.79 Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: Pro forma income from continuing operations $ 3.77 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 Total Level 1 Level 2 Level 3 December 31, 2016 Assets: Trading securities $ 51 $ 51 $ — $ — Cash surrender value of life insurance policies 32 — 32 — Available-for-sale equity securities 3 3 — — Total $ 86 $ 54 $ 32 $ — Liabilities: Deferred compensation liabilities $ 91 $ — $ 91 $ — Interest rate swaps 88 — 88 — Contingent consideration 3 — — 3 Total $ 182 $ — $ 179 $ 3 December 31, 2015 Assets: Trading securities $ 49 $ 49 $ — $ — Cash surrender value of life insurance policies 29 — 29 — Interest rate swaps 23 — 23 — Available-for-sale equity securities 6 6 — — Total $ 107 $ 55 $ 52 $ — Liabilities: Deferred compensation liabilities $ 85 $ — $ 85 $ — Interest rate swaps 6 — 6 — Contingent consideration 3 — — 3 Total $ 94 $ — $ 91 $ 3 |
Reconciliation of Beginning and Ending Liability Balances Unobservable Inputs | The following table provides a reconciliation of the beginning and ending balances of liabilities using significant unobservable inputs (Level 3): Contingent Consideration Balance, December 31, 2014 $ 17 Settlements (1 ) Total (gains) losses - realized/unrealized: Included in earnings (13 ) Balance, December 31, 2015 3 Balance, December 31, 2016 $ 3 |
TAXES ON INCOME TAXES ON INCOME
TAXES ON INCOME TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense | The components of income tax expense from continuing operations for 2016 , 2015 and 2014 were as follows: 2016 2015 2014 Current: Federal $ 346 $ 231 $ 204 State and local 45 27 34 Foreign 1 3 3 Deferred: Federal 33 104 28 State and local 4 7 (6 ) Foreign — 1 (1 ) Total $ 429 $ 373 $ 262 |
Reconciliation of the Federal Statutory Rate | A reconciliation of the federal statutory rate to the Company's effective tax rate for 2016 , 2015 and 2014 was as follows: 2016 2015 2014 Tax provision at statutory rate 35.0 % 35.0 % 35.0 % State and local income taxes, net of federal benefit 3.3 2.6 3.2 Gains and losses on book and tax basis difference 3.3 (2.7 ) — Adjustments to unrecognized tax positions 0.5 (0.4 ) (5.1 ) Impact of noncontrolling interests (1.8 ) (1.6 ) (1.7 ) Impact of equity earnings 1.0 0.7 1.1 Other, net (1.8 ) 0.2 (0.7 ) Effective tax rate 39.5 % 33.8 % 31.8 % |
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) as of December 31, 2016 and 2015 were as follows: 2016 2015 Non-current deferred tax assets (liabilities): Accounts receivable reserves $ 94 $ 95 Liabilities not currently deductible 189 202 Stock-based compensation 58 49 Capitalized R&D expense — 1 Basis differences in investments, joint ventures and subsidiaries (87 ) (90 ) Net operating loss carryforwards, net of valuation allowance 120 140 Depreciation and amortization (533 ) (517 ) Total non-current deferred tax liabilities, net $ (159 ) $ (120 ) |
Schedule of Unrecognized Benefits | The total amount of unrecognized tax benefits as of and for the years ended December 31, 2016 , 2015 and 2014 consisted of the following: 2016 2015 2014 Balance, beginning of year $ 91 $ 122 $ 168 Additions: For tax positions of current year 3 5 17 For tax positions of prior years 12 5 1 Reductions: Changes in judgment (1 ) (11 ) (56 ) Expirations of statutes of limitations (7 ) (3 ) (6 ) Settlements — (27 ) (2 ) Balance, end of year $ 98 $ 91 $ 122 |
SUPPLEMENTAL CASH FLOW & OTHE38
SUPPLEMENTAL CASH FLOW & OTHER DATA (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow and Other Data | Supplemental cash flow and other data for the years ended December 31, 2016 , 2015 and 2014 were as follows: 2016 2015 2014 Depreciation expense $ 177 $ 223 $ 220 Amortization expense 72 81 94 Depreciation and amortization expense $ 249 $ 304 $ 314 Interest expense $ (144 ) $ (154 ) $ (167 ) Interest income 1 1 3 Interest expense, net $ (143 ) $ (153 ) $ (164 ) Interest paid $ 148 $ 172 $ 170 Income taxes paid $ 361 $ 319 $ 327 Assets acquired under capital leases $ — $ 3 $ 12 Accounts payable associated with capital expenditures $ 9 $ 15 $ 26 Dividend payable $ 62 $ 55 $ 48 Businesses acquired: Fair value of assets acquired $ 139 $ 63 $ 853 Fair value of liabilities assumed — — 85 Fair value of net assets acquired 139 63 768 Merger consideration paid (payable), net — 4 (30 ) Cash paid for business acquisitions 139 67 738 Less: Cash acquired — — 10 Business acquisitions, net of cash acquired $ 139 $ 67 $ 728 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment as of December 31, 2016 and 2015 consisted of the following: 2016 2015 Land $ 28 $ 28 Buildings and improvements 379 370 Laboratory equipment and furniture and fixtures 1,462 1,407 Leasehold improvements 533 535 Computer software developed or obtained for internal use 834 756 Construction-in-progress 193 136 3,429 3,232 Less: Accumulated depreciation and amortization (2,400 ) (2,307 ) Total $ 1,029 $ 925 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill, Net | The changes in goodwill for the years ended December 31, 2016 and 2015 were as follows: 2016 2015 Balance, beginning of year $ 5,905 $ 6,032 Goodwill acquired during the year 95 33 Reclassification to assets held for sale — (160 ) Balance, end of year $ 6,000 $ 5,905 |
Intangible Assets Excluding Goodwill | Intangible assets as of December 31, 2016 and 2015 consisted of the following: Weighted Average Amort-ization Period (Years) December 31, 2016 December 31, 2015 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Amortizing intangible assets: Customer-related intangibles 18 $ 971 $ (346 ) $ 625 $ 936 $ (296 ) $ 640 Non-compete agreements 6 6 (4 ) 2 6 (3 ) 3 Technology 18 93 (40 ) 53 93 (35 ) 58 Other 9 103 (70 ) 33 106 (59 ) 47 Total 18 1,173 (460 ) 713 1,141 (393 ) 748 Intangible assets not subject to amortization: Tradenames 235 — 235 235 — 235 Other 1 — 1 1 — 1 Total intangible assets $ 1,409 $ (460 ) $ 949 $ 1,377 $ (393 ) $ 984 |
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, 2016 is as follows: Year Ending December 31, 2017 $ 69 2018 65 2019 64 2020 64 2021 57 Thereafter 394 Total $ 713 |
ACCOUNTS PAYABLE AND ACCRUED 41
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses as of December 31, 2016 and 2015 consisted of the following: 2016 2015 Trade accounts payable $ 261 $ 279 Accrued wages and benefits (including incentive compensation) 316 305 Income taxes payable 3 4 Accrued interest 46 52 Accrued insurance 31 60 Merger consideration payable 2 2 Dividend payable 62 55 Accrued expenses 254 257 Total $ 975 $ 1,014 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Instruments [Abstract] | |
Long-term Debt | Long-term debt as of December 31, 2016 and 2015 consisted of the following: 2016 2015 3.20% Senior Notes due April 2016 — 150 2.70% Senior Notes due April 2019 300 300 4.75% Senior Notes due January 2020 521 522 2.50% Senior Notes due March 2020 299 299 4.70% Senior Notes due April 2021 563 554 4.25% Senior Notes due April 2024 307 313 3.50% Senior Notes due March 2025 568 601 3.45% Senior Notes due June 2026 469 — 6.95% Senior Notes due July 2037 174 247 5.75% Senior Notes due January 2040 244 368 4.70% Senior Notes due March 2045 300 300 Other 13 22 Debt issuance costs (24 ) (25 ) Total long-term debt 3,734 3,651 Less: Current portion of long-term debt 6 159 Total long-term debt, net of current portion $ 3,728 $ 3,492 |
Schedule of Maturities of Long-term Debt | As of December 31, 2016 , long-term debt matures as follows: Year Ending December 31, 2017 $ 6 2018 4 2019 302 2020 801 2021 550 Thereafter 2,125 Total maturities of long-term debt 3,788 Unamortized discount (13 ) Debt issuance costs (24 ) Fair value basis adjustments attributable to hedged debt (17 ) Total long-term debt 3,734 Less: Current portion of long-term debt 6 Total long-term debt, net of current portion $ 3,728 |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
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, 2016 and 2015 is as follows: Notional Amount Debt Instrument 2016 2015 4.75% Senior Notes due January 2020 $ — $ 350 4.70% Senior Notes due April 2021 — 400 4.25% Senior Notes due April 2024 250 250 3.50% Senior Notes due March 2025 600 200 3.45% Senior Notes due June 2026 350 — $ 1,200 $ 1,200 |
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, 2016 December 31, 2015 Balance Sheet Classification Fair Value Balance Sheet Classification Fair Value Derivatives Designated as Hedging Instruments Asset Derivatives: Interest rate swaps $ — Other assets $ 23 Liability Derivatives: Interest rate swaps Other liabilities 88 Other liabilities 6 Total Net Derivatives (Liabilities) Assets $ (88 ) $ 17 |
STOCKHOLDERS_ EQUITY AND REDE44
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive income (loss) by component for 2016 , 2015 and 2014 were as follows: Foreign Currency Translation Adjustment Market Value Adjustment Net Deferred Loss on Cash Flow Hedges Other Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2013 $ (2 ) $ — $ (5 ) $ (1 ) $ (8 ) Other comprehensive income (loss) before reclassifications (7 ) (1 ) (11 ) (1 ) (20 ) Amounts reclassified from accumulated other comprehensive income (loss) — — 1 — 1 Net current period other comprehensive income (loss) (7 ) (1 ) (10 ) (1 ) (19 ) Balance, December 31, 2014 (9 ) (1 ) (15 ) (2 ) (27 ) Other comprehensive income (loss) before reclassifications (15 ) — — 1 (14 ) Amounts reclassified from accumulated other comprehensive income (loss) — — 3 — 3 Net current period other comprehensive income (loss) (15 ) — 3 1 (11 ) Balance, December 31, 2015 (24 ) (1 ) (12 ) (1 ) (38 ) Other comprehensive income (loss) before reclassifications (34 ) (2 ) — — (36 ) Amounts reclassified from accumulated other comprehensive income (loss) — — 2 — 2 Net current period other comprehensive income (loss) (34 ) (2 ) 2 — (34 ) Balance, December 31, 2016 $ (58 ) $ (3 ) $ (10 ) $ (1 ) $ (72 ) |
STOCK OWNERSHIP AND COMPENSAT45
STOCK OWNERSHIP AND COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 stock options granted in the periods presented were: 2016 2015 2014 Fair value at grant date $10.35 $11.57 $10.99 Expected volatility 21.6% 21.0% 25.1% Dividend yield 2.4% 2.1% 2.1% Risk-free interest rate 1.4% 1.7% 1.6% - 2.0% Expected holding period, in years 5.3 5.3 5.5 - 6.6 |
Summary of Transactions Under The Company's Stock Option Plans | The following summarizes the activity relative to stock option awards for 2016 : Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Options outstanding, beginning of year 7.7 $ 59.65 Options granted 2.8 66.87 Options exercised (1.3 ) 56.17 Options forfeited and canceled (0.1 ) 66.53 Options outstanding, end of year 9.1 $ 62.27 7.2 $ 269 Exercisable, end of year 4.2 $ 57.84 5.7 $ 144 Vested and expected to vest, end of year 8.8 $ 62.10 7.2 $ 262 |
Summary of Transactions Under Stock Awards Other than Options | The following summarizes the activity relative to stock awards, including restricted stock awards, restricted stock units and performance share units, for 2016 , 2015 and 2014 : 2016 2015 2014 Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares outstanding, beginning of year 1.7 $ 59.92 1.9 $ 55.50 1.9 $ 57.08 Shares granted 0.6 67.26 0.6 71.17 0.7 52.72 Shares vested (0.4 ) 58.98 (0.3 ) 55.74 (0.3 ) 57.14 Shares forfeited and canceled (0.4 ) 57.31 (0.5 ) 58.18 (0.4 ) 56.44 Shares outstanding, end of year 1.5 $ 63.88 1.7 $ 59.92 1.9 $ 55.50 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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 as of December 31, 2016 are as follows: Year Ending December 31, 2017 $ 179 2018 129 2019 92 2020 64 2021 44 Thereafter 153 Minimum lease payments $ 661 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summarized Financial Information for Discontinued Operations | Summarized financial information for the discontinued operations is set forth below: 2016 2015 2014 Net revenues $ — $ — $ — Income from discontinued operations before taxes — — 1 Income tax benefit — — (4 ) Income from discontinued operations, net of taxes $ — $ — $ 5 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following table is a summary of segment information for the years ended December 31, 2016 , 2015 and 2014 . 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 (loss) for the segment. General corporate activities included in the table below are comprised of general management and administrative corporate expenses, amortization and impairment of intangibles assets, other operating income and expenses net of certain general corporate activity costs that are allocated to the DIS and DS businesses, and the gains on disposition of businesses associated with the dispositions of Focus Diagnostics and Clinical Trials (see Note 6) . The accounting policies of the segments are the same as those of the Company as set forth in Note 2. 2016 2015 2014 Net revenues: DIS business $ 7,138 $ 6,965 $ 6,873 All other operating segments 377 528 562 Total net revenues $ 7,515 $ 7,493 $ 7,435 Operating earnings (loss): DIS business $ 1,244 $ 1,118 $ 1,068 All other operating segments 64 110 94 General corporate activities (31 ) 171 (179 ) Total operating income 1,277 1,399 983 Non-operating expenses, net (191 ) (296 ) (160 ) Income from continuing operations before income taxes and equity in earnings of equity method investees 1,086 1,103 823 Income tax expense (429 ) (373 ) (262 ) Equity in earnings of equity method investees, net of taxes 39 23 26 Income from continuing operations 696 753 587 Income from discontinued operations, net of taxes — — 5 Net income 696 753 592 Less: Net income attributable to noncontrolling interests 51 44 36 Net income attributable to Quest Diagnostics $ 645 $ 709 $ 556 Depreciation and amortization expense for the years ended December 31, 2016 , 2015 and 2014 were as follows: 2016 2015 2014 DIS business $ 170 $ 212 $ 206 All other operating segments 6 10 13 General corporate 73 82 95 Total depreciation and amortization $ 249 $ 304 $ 314 Capital expenditures for the years ended December 31, 2016 , 2015 and 2014 were as follows: 2016 2015 2014 DIS business $ 264 $ 243 $ 283 All other operating segments 21 16 17 General corporate 8 4 8 Total capital expenditures $ 293 $ 263 $ 308 Net revenues by major service for the years ended December 31, 2016 , 2015 and 2014 were as follows: 2016 2015 2014 Routine clinical testing services $ 4,179 $ 4,078 $ 4,066 Gene-based and esoteric (including advanced diagnostics) testing services 2,335 2,256 2,158 Anatomic pathology testing services 624 631 649 All other 377 528 562 Total net revenues $ 7,515 $ 7,493 $ 7,435 |
Quarterly Operating Results (49
Quarterly Operating Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Quarterly Operating Results | 2016 (a) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (b) (c) (d) (e) Net revenues $ 1,863 $ 1,906 $ 1,885 $ 1,861 $ 7,515 Gross profit 719 751 728 701 2,899 Income from continuing operations 115 209 205 167 696 Income from discontinued operations, net of taxes — — — — — Net income 115 209 205 167 696 Less: Net income attributable to noncontrolling interests 12 14 13 12 51 Net income attributable to Quest Diagnostics $ 103 $ 195 $ 192 $ 155 $ 645 Amounts attributable to Quest Diagnostics' stockholders: Income from continuing operations $ 103 $ 195 $ 192 $ 155 $ 645 Income from discontinued operations, net of taxes — — — — — Net income $ 103 $ 195 $ 192 $ 155 $ 645 Earnings per share attributable to Quest Diagnostics' stockholders - basic: Income from continuing operations $ 0.72 $ 1.38 $ 1.37 $ 1.11 $ 4.58 Income from discontinued operations — — — — — Net income $ 0.72 $ 1.38 $ 1.37 $ 1.11 $ 4.58 Earnings per share attributable to Quest Diagnostics' stockholders - diluted: Income from continuing operations $ 0.71 $ 1.37 $ 1.34 $ 1.09 $ 4.51 Income from discontinued operations — — — — — Net income $ 0.71 $ 1.37 $ 1.34 $ 1.09 $ 4.51 2015 (a) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (f) (g) (h) (i) Net revenues $ 1,839 $ 1,925 $ 1,880 $ 1,849 $ 7,493 Gross profit 676 743 718 699 2,836 Income from continuing operations 70 129 354 200 753 Income from discontinued operations, net of taxes — — — — — Net income 70 129 354 200 753 Less: Net income attributable to noncontrolling interests 9 11 12 12 44 Net income attributable to Quest Diagnostics $ 61 $ 118 $ 342 $ 188 $ 709 Amounts attributable to Quest Diagnostics' stockholders: Income from continuing operations $ 61 $ 118 $ 342 $ 188 $ 709 Income from discontinued operations, net of taxes — — — — — Net income $ 61 $ 118 $ 342 $ 188 $ 709 Earnings per share attributable to Quest Diagnostics' stockholders - basic: Income from continuing operations $ 0.42 $ 0.82 $ 2.37 $ 1.31 $ 4.92 Income from discontinued operations — — — — — Net income $ 0.42 $ 0.82 $ 2.37 $ 1.31 $ 4.92 Earnings per share attributable to Quest Diagnostics' stockholders - diluted: Income from continuing operations $ 0.42 $ 0.81 $ 2.35 $ 1.29 $ 4.87 Income from discontinued operations — — — — — Net income $ 0.42 $ 0.81 $ 2.35 $ 1.29 $ 4.87 (a) 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 NID as discontinued operations for all periods presented (see Note 18). In May 2016, the Company completed the sale of Focus Diagnostics (see Note 6). In July 2015, the Company contributed its clinical trials testing business to a newly formed global clinical trials central laboratory services joint venture, Q 2 Solutions (see Note 6). Subsequent to the contribution, the Company's ownership interest in the joint venture is being accounted for under the equity method of accounting. (b) Included pre-tax charges of $21 million , primarily associated with systems conversions and integration costs incurred in connection with further restructuring and integrating the Company ( $7 million in cost of services, $12 million in selling, general and administrative expenses and $2 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $1 million in other operating (income) expense, net, representing non-cash asset impairment charges; pre-tax charges in selling, general and administrative expenses of $2 million , primarily representing costs incurred related to certain legal matters; pre-tax charges of $48 million on retirement of debt associated with the March 2016 cash tender offer in other (expense) income, net (see Note 13); and pre-tax charges of $1 million representing non-cash asset impairment charges associated with an investment. (c) Included a pre-tax gain of $118 million associated with the sales of the Focus Diagnostics; pre-tax charges of $19 million , primarily associated with systems conversions and integration costs incurred in connection with further restructuring and integrating the Company ( $10 million in cost of services, $8 million in selling, general and administrative expenses and $1 million in equity in earnings of equity method investees, net of taxes); pre-tax charges in selling, general and administrative expenses of $1 million , primarily representing costs incurred related to certain legal matters; and pre-tax charges of $6 million representing non-cash asset impairment charges associated with certain investments in other (expense) income, net. (d) Included pre-tax charges of $18 million , primarily associated with systems conversions and integration costs incurred in connection with further restructuring and integrating the Company ( $8 million in cost of services and $10 million in selling, general and administrative expenses); and pre-tax gain of $21 million , principally a result of a gain on escrow recovery associated with an acquisition in other operating (income) expense, net. (e) Included pre-tax charges of $24 million , primarily associated with systems conversions and integration costs incurred in connection with further restructuring and integrating the Company ( $15 million in cost of services, $7 million in selling, general and administrative expenses, $1 million in other operating (income) expense, net and $1 million in equity in earnings of equity method investees, net of taxes); and pre-tax charges of $6 million in other operating (income) expense, net, representing non-cash asset impairment charges. (f) Included pre-tax charges of $31 million , primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company ( $20 million in cost of services and $11 million in selling, general and administrative expenses); pre-tax charges of $8 million in other operating (income) expense, net, representing non-cash asset impairment charges associated with our Celera products business; pre-tax charges in selling, general and administrative expenses of $2 million , principally representing costs incurred related to certain legal matters; and pre-tax charges of $79 million on retirement of debt associated with the March 2015 cash tender offer in other (expense) income, net (see Note 13). (g) Included pre-tax charges of $23 million , primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company ( $11 million in cost of services and $12 million in selling, general and administrative expenses); a pre-tax gain included in other operating (income) expense, net of $13 million associated with a decrease in the fair value of the contingent consideration accrual associated with our Summit Health acquisition (see Note 5 and Note 7); pre-tax charges in selling, general and administrative expenses of $5 million , principally representing costs incurred related to certain legal matters; pre-tax charges of $5 million in other operating (income) expense, net, representing non-cash asset impairment charges; and pre-tax charges of $65 million on retirement of debt associated with the April 2015 redemption in other (expense) income, net (see Note 13). (h) Included a pre-tax gain of $334 million associated with the contribution of the Company's clinical trials testing business to Q 2 Solutions (see Note 6); and pre-tax charges of $34 million , primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company ( $20 million in cost of services, $9 million in selling, general and administrative expenses and $5 million equity in earnings of equity method investees, net of taxes). (i) Included pre-tax charges of $22 million , primarily associated with workforce reductions and professional fees incurred in connection with further restructuring and integrating the Company ( $12 million in cost of services and $10 million in selling, general and administrative expenses); pre-tax charges of $11 million in other operating (income) expense, net, representing non-cash asset impairment charges associated with winding down a subsidiary; and pre-tax charges in selling, general and administrative expenses of $10 million , principally representing costs incurred related to certain legal matters. Income from continuing operations includes a deferred income tax benefit of $58 million associated with winding down a subsidiary. |
SUMMARY OF SIGNIFICANT ACCOUN50
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Equity method investments carrying value | $ 443 | $ 473 | $ 443 | $ 473 | |||||||
Share of equity earnings from investments in affiliates | $ 39 | $ 23 | $ 26 | ||||||||
Percentage of total revenues generated by medicaid and medicare programs | 17.00% | 17.00% | 17.00% | ||||||||
Purchase price discount ESPP | 15.00% | 15.00% | |||||||||
Percentage of accounts receivable due from government payers | 15.00% | 16.00% | 15.00% | 16.00% | |||||||
Percentage of receivables due from patients | 17.00% | 17.00% | 17.00% | 17.00% | |||||||
Net income | $ 167 | $ 205 | $ 209 | $ 115 | $ 200 | $ 354 | $ 129 | $ 70 | $ 696 | $ 753 | $ 592 |
Available-for-sale equity securities | 3 | 6 | 3 | 6 | |||||||
Trading equity securities | 51 | 49 | 51 | 49 | |||||||
Other investments | 6 | 8 | 6 | 8 | |||||||
Total | 60 | $ 63 | 60 | 63 | |||||||
Gross unrealized gains from available-for-sale equity securities | $ 5 | 5 | |||||||||
Trading equity securities gain or (loss) | 3 | 0 | 3 | ||||||||
Net cash provided by (used in) operating activities | 1,069 | 821 | 944 | ||||||||
Net cash (used in) provided by financing activities | (691) | (518) | 86 | ||||||||
Operating income (loss) | 1,277 | 1,399 | 983 | ||||||||
Service Life [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Net income | $ 23 | ||||||||||
Earnings per share, basic and diluted | $ 0.16 | ||||||||||
Operating income (loss) | $ 37 | ||||||||||
New Accounting Pronouncement, Early Adoption, Effect [Member] | Accounting Standards Update 2016-09, Excess Tax Benefit Component [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Effect of adoption, quantification | $ 9 | ||||||||||
Net cash provided by (used in) operating activities | 5 | 0 | |||||||||
Net cash (used in) provided by financing activities | 5 | 0 | |||||||||
New Accounting Pronouncement, Early Adoption, Effect [Member] | Accounting Standards Update 2016-09, Taxes Paid Related to Employee Payroll [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Net cash provided by (used in) operating activities | 7 | 6 | |||||||||
Net cash (used in) provided by financing activities | $ 7 | $ 6 | |||||||||
Minimum [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Equity method investment, ownership percentage | 20.00% | 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% | 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 | 5 years | ||||||||||
Laboratory Equipment and Furniture and Fixtures [Member] | Maximum [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 12 years | ||||||||||
Internal Use Software [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 5 years | ||||||||||
Laboratory Equipment [Member] | Minimum [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 7 years | 5 years | |||||||||
Laboratory Equipment [Member] | Maximum [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 10 years | 7 years | |||||||||
Furniture and Fixtures [Member] | Minimum [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 5 years | 3 years | |||||||||
Furniture and Fixtures [Member] | Maximum [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 12 years | 7 years | |||||||||
Software and Software Development Costs [Member] | |||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||
Property, plant and equipment, useful life | 5 years | 3 years |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share, Basic and Diluted [Abstract] | |||||||||||
Income from continuing operations | $ 155 | $ 192 | $ 195 | $ 103 | $ 188 | $ 342 | $ 118 | $ 61 | $ 645 | $ 709 | $ 551 |
Income from discontinued operations, net of taxes | 0 | 0 | 5 | ||||||||
Net income attributable to Quest Diagnostics’ common stockholders | $ 155 | $ 192 | $ 195 | $ 103 | $ 188 | $ 342 | $ 118 | $ 61 | 645 | 709 | 556 |
Less: Earnings allocated to participating securities | 3 | 3 | 2 | ||||||||
Earnings available to Quest Diagnostics' common stockholders - basic and diluted | $ 642 | $ 706 | $ 549 | ||||||||
Weighted average common shares outstanding - basic | 140 | 144 | 145 | ||||||||
Stock options and performance share units | 2 | 1 | 0 | ||||||||
Weighted average common shares outstanding - diluted | 142 | 145 | 145 | ||||||||
Income from continuing operations, per basic share | $ 1.11 | $ 1.37 | $ 1.38 | $ 0.72 | $ 1.31 | $ 2.37 | $ 0.82 | $ 0.42 | $ 4.58 | $ 4.92 | $ 3.80 |
Income (loss) from discontinued operations, per basic share | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0.03 |
Net income, per basic share | 1.11 | 1.37 | 1.38 | 0.72 | 1.31 | 2.37 | 0.82 | 0.42 | 4.58 | 4.92 | 3.83 |
Income from continuing operations, per diluted share | 1.09 | 1.34 | 1.37 | 0.71 | 1.29 | 2.35 | 0.81 | 0.42 | 4.51 | 4.87 | 3.78 |
Income (loss) from discontinued operations, per diluted share | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0.03 |
Net income, per diluted share | $ 1.09 | $ 1.34 | $ 1.37 | $ 0.71 | $ 1.29 | $ 2.35 | $ 0.81 | $ 0.42 | $ 4.51 | $ 4.87 | $ 3.81 |
Stock options and performance share units not included due to their antidilutive effect | 1 | 2 | 2 |
RESTRUCTURING ACTIVITIES (Narra
RESTRUCTURING ACTIVITIES (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 11 | $ 39 | |
Invigorate Program [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 11 | 39 | $ 44 |
Invigorate Program [Member] | Cost of Sales [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 6 | 32 | 21 |
Invigorate Program [Member] | Selling, General and Administrative Expenses [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 5 | $ 7 | $ 23 |
RESTRUCTURING ACTIVITIES (Pre-T
RESTRUCTURING ACTIVITIES (Pre-Tax Restructuring charges) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | $ 11 | $ 39 | |
Invigorate Program [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Employee separation costs | 9 | 38 | $ 31 |
Facility-related costs | 2 | 1 | 12 |
Asset impairment charges | 0 | 0 | 1 |
Total restructuring charges | $ 11 | $ 39 | $ 44 |
RESTRUCTURING ACTIVITIES (Activ
RESTRUCTURING ACTIVITIES (Activities of Restructuring Liabilities) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 19 | $ 29 |
Restructuring charges | 11 | 39 |
Cash payments | (21) | (46) |
Other / adjustments | (3) | |
Ending balance | 9 | 19 |
Employee Separation Costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 16 | 18 |
Restructuring charges | 9 | 38 |
Cash payments | (19) | (40) |
Other / adjustments | 0 | |
Ending balance | 6 | 16 |
Facility-Related Costs [Member] | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 3 | 11 |
Restructuring charges | 2 | 1 |
Cash payments | (2) | (6) |
Other / adjustments | (3) | |
Ending balance | $ 3 | $ 3 |
BUSINESS ACQUISITIONS (Narrativ
BUSINESS ACQUISITIONS (Narrative) (Details) - USD ($) $ in Millions | Feb. 29, 2016 | Nov. 16, 2015 | Aug. 03, 2015 | Apr. 18, 2014 | Apr. 16, 2014 | Mar. 07, 2014 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||||||||||||||
Total consideration | $ 139 | $ 63 | $ 768 | ||||||||||||||
Goodwill acquired during the year | 95 | 33 | 383 | ||||||||||||||
Goodwill deductible for tax purposes | $ 95 | $ 32 | 95 | 32 | 90 | ||||||||||||
Finite-lived intangibles | 44 | 26 | 44 | 26 | 270 | ||||||||||||
Business acquisitions, net of cash acquired | 139 | 67 | 728 | ||||||||||||||
Net revenues | 1,861 | $ 1,885 | $ 1,906 | $ 1,863 | 1,849 | $ 1,880 | $ 1,925 | $ 1,839 | $ 7,515 | 7,493 | 7,435 | ||||||
Estimated fair value of contingent consideration | $ 26 | ||||||||||||||||
Customer Relationships [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived intangible asset, useful life | 18 years | ||||||||||||||||
Non-compete Agreements [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived intangible asset, useful life | 6 years | ||||||||||||||||
Clinical Laboratory Partners, LLC (CLP) [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Goodwill deductible for tax purposes | $ 91 | ||||||||||||||||
Cash | 135 | ||||||||||||||||
Clinical Laboratory Partners, LLC (CLP) [Member] | Customer Relationships [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived intangibles | $ 43 | ||||||||||||||||
Finite-lived intangible asset, useful life | 15 years | ||||||||||||||||
MemorialCare [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Cash | $ 35 | ||||||||||||||||
Superior Mobile Medics, Inc. [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Cash | $ 27 | ||||||||||||||||
Solstas Lab Parnters Group [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Total consideration | $ 572 | ||||||||||||||||
Cash | 572 | ||||||||||||||||
Finite-lived intangibles | 210 | ||||||||||||||||
Business acquisitions, net of cash acquired | 563 | ||||||||||||||||
Net revenues | 300 | ||||||||||||||||
Operating costs and expenses | 294 | ||||||||||||||||
Integration and transaction related costs | 17 | ||||||||||||||||
Estimated fair value of contingent consideration | 0 | ||||||||||||||||
Transaction related costs due to sellers | 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 | ||||||||||||||||
Solstas Lab Parnters Group [Member] | Customer Relationships [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived intangibles | $ 203 | ||||||||||||||||
Summit Health, Inc. [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Total consideration | 152 | ||||||||||||||||
Cash | 125 | ||||||||||||||||
Finite-lived intangibles | 38 | ||||||||||||||||
Business acquisitions, net of cash acquired | 124 | ||||||||||||||||
Working capital adjustments | 10 | ||||||||||||||||
Estimated fair value of contingent consideration | 22 | $ 0 | $ 0 | $ 13 | |||||||||||||
Transaction related costs due to sellers | 5 | ||||||||||||||||
Contingent consideration arrangements, range of outcomes, value, high | 25 | ||||||||||||||||
Summit Health, Inc. [Member] | Customer Relationships [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Finite-lived intangibles | $ 33 | ||||||||||||||||
Steward Health Care Systems, LLC [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Total consideration | $ 34 | ||||||||||||||||
Cash | 30 | ||||||||||||||||
Estimated fair value of contingent consideration | 4 | ||||||||||||||||
Contingent consideration arrangements, range of outcomes, value, high | $ 4 | $ 4 | |||||||||||||||
Steward Health Care Systems, LLC [Member] | Non-compete Agreements [Member] | |||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||
Contingent consideration arrangements, range of outcomes, value, high | $ 5 |
BUSINESS ACQUISITIONS (Consider
BUSINESS ACQUISITIONS (Consideration Paid) (Details) - USD ($) $ in Millions | Apr. 18, 2014 | Mar. 07, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Estimated fair value of contingent consideration | $ 26 | ||||
Total consideration | $ 139 | $ 63 | $ 768 | ||
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 | $ 0 | $ 13 | ||
Transaction related costs due to sellers | 5 | ||||
Total consideration | $ 152 |
BUSINESS ACQUISITIONS (Purchase
BUSINESS ACQUISITIONS (Purchase Price Allocation) (Details) - USD ($) $ in Millions | Apr. 18, 2014 | Mar. 07, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 6,000 | $ 5,905 | $ 6,032 | ||
Total intangible assets | $ 44 | $ 26 | $ 270 | ||
Solstas Lab Parnters Group [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 9 | ||||
Accounts receivable, net | 48 | ||||
Other current assets | 12 | ||||
Property, plant and equipment, net | 49 | ||||
Goodwill | 271 | ||||
Total intangible assets | 210 | ||||
Non-current deferred income taxes | 48 | ||||
Total assets acquired | 647 | ||||
Current liabilities | 64 | ||||
Non-current deferred income taxes | 3 | ||||
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] | |||||
Total intangible assets | $ 203 | ||||
Weighted average useful life | 20 years | ||||
Solstas Lab Parnters Group [Member] | Tradenames [Member] | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | $ 7 | ||||
Weighted average useful life | 2 years | ||||
Solstas Lab Parnters Group [Member] | Software [Member] | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | $ 0 | ||||
Summit Health, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | $ 1 | ||||
Accounts receivable, net | 9 | ||||
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] | |||||
Total intangible assets | $ 33 | ||||
Weighted average useful life | 15 years | ||||
Summit Health, Inc. [Member] | Tradenames [Member] | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | $ 2 | ||||
Weighted average useful life | 1 year | ||||
Summit Health, Inc. [Member] | Software [Member] | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | $ 3 | ||||
Weighted average useful life | 4 years |
BUSINESS ACQUISITIONS (Pro Form
BUSINESS ACQUISITIONS (Pro Forma) (Details) $ / shares in Units, $ in Millions | 12 Months Ended |
Dec. 31, 2014USD ($)$ / shares | |
Business Combinations [Abstract] | |
Pro forma net revenues | $ | $ 7,520 |
Pro forma income from continuing operations | $ | $ 585 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: | |
Pro forma income from continuing operations | $ / shares | $ 3.79 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: | |
Pro forma income from continuing operations | $ / shares | $ 3.77 |
DISPOSITIONS AND HELD FOR SALE
DISPOSITIONS AND HELD FOR SALE (Details) - USD ($) $ in Millions | May 13, 2016 | Jul. 01, 2015 | Jun. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Pre-tax gain (loss) recognized | $ 118 | $ 334 | $ 0 | ||||
Income tax (benefit) expense | 429 | 373 | 262 | ||||
Income taxes paid | 361 | 319 | 327 | ||||
Deferred income tax expense (benefit) | $ 37 | $ 112 | $ 23 | ||||
Effective tax rate | 39.50% | 33.80% | 31.80% | ||||
Investment in equity method investee | $ 0 | $ 33 | $ 0 | ||||
Equity method investments carrying value | 443 | 473 | |||||
Q² Solutions [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Deferred income tax expense (benefit) | 145 | ||||||
Investment in equity method investee | $ 33 | ||||||
Equity method investment, ownership percentage | 40.00% | ||||||
Equity method investments carrying value | 389 | 416 | |||||
Excess of equity in underlying net assets | $ 219 | ||||||
Clinical Trials [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Pre-tax gain (loss) recognized | $ 334 | ||||||
Discount rate | 12.00% | ||||||
Long-term growth rate | 2.50% | ||||||
Deferred income tax liabilities | $ 145 | ||||||
Focus Diagnostics Products [Member] | DiaSorin [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Supply agreement | 5 years | ||||||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Focus Diagnostics Products [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Consideration | $ 300 | ||||||
Consideration, net | 293 | ||||||
Proceeds held in escrow | 25 | ||||||
Pre-tax gain (loss) recognized | $ 118 | 118 | |||||
Income tax (benefit) expense | 84 | 84 | |||||
Income taxes paid | 91 | ||||||
Deferred income tax expense (benefit) | $ (7) | $ (7) | |||||
Effective tax rate | 71.40% | ||||||
Goodwill | $ 113 | $ 113 | |||||
Intangible assets | 30 | ||||||
Other assets | 38 | ||||||
Liabilities, current | $ 6 | ||||||
Equity Method Investment, Basis Difference [Member] | Q² Solutions [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Amount allocated to finite-lived intangible assets | $ 75 | ||||||
Finite-lived intangible assets, remaining amortization period | 8 years |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Millions | Apr. 18, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | Apr. 16, 2014 |
Business Acquisition [Line Items] | |||||
Contingent consideration | $ 26 | ||||
Fair value of debt | $ 3,700 | $ 3,900 | |||
Summit Health, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration | 22 | 0 | $ 13 | ||
Contingent consideration arrangements, range of outcomes, value, high | $ 25 | ||||
Summit Health, Inc. [Member] | Contingent Consideration [Member] | |||||
Business Acquisition [Line Items] | |||||
Included in earnings | $ 13 | $ 9 | |||
Steward Health Care Systems, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent consideration | $ 4 | ||||
Contingent consideration arrangements, range of outcomes, value, high | $ 4 | ||||
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% |
FAIR VALUE MEASUREMENTS (Recogn
FAIR VALUE MEASUREMENTS (Recognized Assets and Liabilities at Fair Value) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 18, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Available-for-sale equity securities | $ 3 | $ 6 | |
Contingent consideration | $ 26 | ||
Recurring Basis [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Trading securities | 51 | 49 | |
Cash surrender value of life insurance policies | 32 | 29 | |
Available-for-sale equity securities | 3 | 6 | |
Total assets | 86 | 107 | |
Deferred compensation liabilities | 91 | 85 | |
Contingent consideration | 3 | 3 | |
Total liabilities | 182 | 94 | |
Recurring Basis [Member] | Level 1 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Trading securities | 51 | 49 | |
Available-for-sale equity securities | 3 | 6 | |
Total assets | 54 | 55 | |
Contingent consideration | 0 | 0 | |
Recurring Basis [Member] | Level 2 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash surrender value of life insurance policies | 32 | 29 | |
Available-for-sale equity securities | 0 | ||
Total assets | 32 | 52 | |
Deferred compensation liabilities | 91 | 85 | |
Contingent consideration | 0 | 0 | |
Total liabilities | 179 | 91 | |
Recurring Basis [Member] | Level 3 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Available-for-sale equity securities | 0 | 0 | |
Total assets | 0 | 0 | |
Contingent consideration | 3 | 3 | |
Total liabilities | 3 | 3 | |
Recurring Basis [Member] | Interest Rate Swaps [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative asset | 23 | ||
Derivative instruments, liabilities | 88 | 6 | |
Recurring Basis [Member] | Interest Rate Swaps [Member] | Level 1 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative asset | 0 | ||
Recurring Basis [Member] | Interest Rate Swaps [Member] | Level 2 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative asset | 23 | ||
Derivative instruments, liabilities | $ 88 | 6 | |
Recurring Basis [Member] | Interest Rate Swaps [Member] | Level 3 [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Derivative asset | $ 0 |
FAIR VALUE MEASUREMENTS (Reconc
FAIR VALUE MEASUREMENTS (Reconciliation of Beginning and Ending Balances of Liabilities Unobservable Inputs) (Details) - Level 3 [Member] - Contingent Consideration [Member] - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 17 | |
Settlements | (1) | |
Included in earnings | (13) | |
Ending Balance | 3 | |
Ending Balance | $ 17 | $ 3 |
TAXES ON INCOME (Details)
TAXES ON INCOME (Details) - USD ($) $ in Millions | May 13, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Income Tax Contingency [Line Items] | |||||
Income (loss) from continuing operations - domestic | $ 1,100 | $ 1,100 | $ 810 | ||
Income (loss) from continuing operations - foreign | 4 | 11 | 13 | ||
Deferred income tax expense (benefit) | 37 | 112 | 23 | ||
Current federal income tax expense | 346 | 231 | 204 | ||
Current state and local income tax expense | 45 | 27 | 34 | ||
Current foreign income tax expense | 1 | 3 | 3 | ||
Defered federal income tax expense (benefit) | 33 | 104 | 28 | ||
Deferred state and local income tax expense (benefit) | 4 | 7 | (6) | ||
Deferred foreign income tax expense (benefit) | 0 | 1 | (1) | ||
Total | $ 429 | $ 373 | $ 262 | ||
Tax provision at statutory rate | 35.00% | 35.00% | 35.00% | ||
State and local income taxes, net of federal benefit | 3.30% | 2.60% | 3.20% | ||
Gains and losses on book and tax basis difference | 3.30% | (2.70%) | 0.00% | ||
Adjustments to unrecognized tax positions | 0.50% | (0.40%) | (5.10%) | ||
Impact of noncontrolling interests | (1.80%) | (1.60%) | (1.70%) | ||
Impact of equity earnings | 1.00% | 0.70% | 1.10% | ||
Other, net | (1.80%) | 0.20% | (0.70%) | ||
Effective tax rate | 39.50% | 33.80% | 31.80% | ||
Accounts receivable reserves | $ 95 | $ 94 | $ 95 | ||
Liabilities not currently deductible non-current DTA | 202 | 189 | 202 | ||
Stock-based compensation | 49 | 58 | 49 | ||
Capitalized R&D expense | 1 | 0 | 1 | ||
Basis differences in investments, joint ventures and subsidiaries | (90) | (87) | (90) | ||
Net operating loss carryfowards, net of valuation allowance | 140 | 120 | 140 | ||
Non-current deferred tax liability - depreciation and amortization | (517) | (533) | (517) | ||
Total non-current deferred tax liabilities, net | (120) | (159) | (120) | ||
Total non-current deferred tax assets | 37 | 32 | 37 | ||
Total non-current deferred tax liabilities | 157 | 191 | 157 | ||
Operating loss carryforwards | 222 | 204 | 222 | $ 242 | |
Deferred tax assets, valuation allowance | 54 | 56 | 54 | 60 | |
Income taxes payable | 50 | 62 | 50 | ||
Prepaid taxes | 41 | 14 | 41 | ||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||||
Unrecognized tax benefits, beginning balance | 91 | 122 | 168 | ||
Additions for tax positions of current year | 3 | 5 | 17 | ||
Additions for tax positions of prior years | 12 | 5 | 1 | ||
Reductions for changes in judgment | (1) | (11) | (56) | ||
Reductions for expirations of statutes of limitations | (7) | (3) | (6) | ||
Reductions for settlements | 0 | (27) | (2) | ||
Unrecognized tax benefits, ending balance | 91 | 98 | 91 | 122 | |
Unrecognized tax benefits that would impact effective tax rate | 44 | ||||
Significant change in unrecognized tax benefits is reasonably possible, estimated range of change, upper bound | 11 | ||||
Unrecognized tax Benefits, interest on income taxes expense | 2 | 0 | $ (1) | ||
Unrecognized tax benefits, interest on income taxes accrued | 9 | 12 | 9 | ||
Domestic Country [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Net operating loss carryforwards | 215 | ||||
State and Local Jurisdiction [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Net operating loss carryforwards | 1,400 | ||||
Foreign Country [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Net operating loss carryforwards | 57 | ||||
Q² Solutions [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Deferred income tax expense (benefit) | 145 | ||||
Subsidiaries [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Deferred income tax expense (benefit) | $ (58) | $ (58) | |||
Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | Focus Diagnostics Products [Member] | |||||
Income Tax Contingency [Line Items] | |||||
Taxes payable, current | $ 91 | ||||
Deferred income tax expense (benefit) | (7) | (7) | |||
Total | $ 84 | $ 84 | |||
Effective tax rate | 71.40% |
SUPPLEMENTAL CASH FLOW & OTHE64
SUPPLEMENTAL CASH FLOW & OTHER DATA (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Supplemental Cash Flow Elements [Abstract] | |||
Depreciation expense | $ 177 | $ 223 | $ 220 |
Amortization expense | 72 | 81 | 94 |
Depreciation and amortization expense | 249 | 304 | 314 |
Interest expense | (144) | (154) | (167) |
Interest income | 1 | 1 | 3 |
Interest expense, net | (143) | (153) | (164) |
Interest paid | 148 | 172 | 170 |
Income taxes paid | 361 | 319 | 327 |
Assets acquired under capital leases | 0 | 3 | 12 |
Accounts payable associated with capital expenditures | 9 | 15 | 26 |
Dividend payable | 62 | 55 | 48 |
Fair value of assets acquired | 139 | 63 | 853 |
Fair value of liabilities assumed | 0 | 0 | 85 |
Fair value of net assets acquired | 139 | 63 | 768 |
Merger consideration paid (payable) | 0 | 4 | (30) |
Cash paid for business acquisitions | 139 | 67 | 738 |
Less: cash acquired | 0 | 10 | |
Business acquisitions, net of cash acquired | $ 139 | $ 67 | $ 728 |
PROPERTY, PLANT AND EQUIPMENT65
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,429 | $ 3,232 |
Less: accumulated depreciation and amortization | (2,400) | (2,307) |
Property, plant and equipment, net | 1,029 | 925 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 28 | 28 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 379 | 370 |
Laboratory Equipment, Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,462 | 1,407 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 533 | 535 |
Computer Software Developed or Obtained for Internal Use [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 834 | 756 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 193 | $ 136 |
GOODWILL AND INTANGIBLE ASSET66
GOODWILL AND INTANGIBLE ASSETS (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of intangible assets | $ 7 | $ 16 | |
Amortization of intangible assets | $ 72 | $ 81 | $ 94 |
GOODWILL AND INTANGIBLE ASSET67
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | |||
Goodwill, balance at beginning of year | $ 5,905 | $ 6,032 | |
Goodwill acquired during the year | 95 | 33 | $ 383 |
Reclassification to assets held for sale | 0 | (160) | |
Goodwill, balance at end of year | 6,000 | 5,905 | $ 6,032 |
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets, gross excluding goodwill | 1,409 | 1,377 | |
Accumulated amortization, intangible assets | (460) | (393) | |
Total intangible assets, net | 949 | 984 | |
Future amortization expense, 2017 | 69 | ||
Future amortization expense, 2018 | 65 | ||
Future amortization expense, 2019 | 64 | ||
Future amortization expense, 2020 | 64 | ||
Future amortization expense, 2021 | 57 | ||
Future amortization expense, thereafter | 394 | ||
Future amortization expense, total | 713 | ||
Intangible Assets Not Subject to Amortization - Tradenames [Member] | |||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets, gross excluding goodwill | 235 | 235 | |
Total intangible assets, net | 235 | 235 | |
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 | $ 971 | 936 | |
Accumulated amortization, intangible assets | (346) | (296) | |
Total intangible assets, net | $ 625 | 640 | |
Non-compete Agreements [Member] | |||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Weighted average amortization period | 6 years | ||
Intangible assets, gross excluding goodwill | $ 6 | 6 | |
Accumulated amortization, intangible assets | (4) | (3) | |
Total intangible assets, net | $ 2 | 3 | |
Technology [Member] | |||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Weighted average amortization period | 18 years | ||
Intangible assets, gross excluding goodwill | $ 93 | 93 | |
Accumulated amortization, intangible assets | (40) | (35) | |
Total intangible assets, net | $ 53 | 58 | |
Other Intangible Assets, Subject To Amortization [Member] | |||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Weighted average amortization period | 9 years | ||
Intangible assets, gross excluding goodwill | $ 103 | 106 | |
Accumulated amortization, intangible assets | (70) | (59) | |
Total intangible assets, net | $ 33 | 47 | |
Total Amortizing Intangible Assets [Member] | |||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | |||
Weighted average amortization period | 18 years | ||
Intangible assets, gross excluding goodwill | $ 1,173 | 1,141 | |
Accumulated amortization, intangible assets | (460) | (393) | |
Total intangible assets, net | $ 713 | $ 748 |
ACCOUNTS PAYABLE AND ACCRUED 68
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Schedule of Accounts Payable and Accrued Expenses) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Trade accounts payable | $ 261 | $ 279 |
Accrued wages and benefits (including incentive compensation) | 316 | 305 |
Income taxes payable | 3 | 4 |
Accrued interest | 46 | 52 |
Accrued insurance | 31 | 60 |
Merger consideration payable | 2 | 2 |
Dividend payable | 62 | 55 |
Accrued expenses | 254 | 257 |
Accounts payable and accrued expenses | $ 975 | $ 1,014 |
DEBT (Long-Term Debt) (Details)
DEBT (Long-Term Debt) (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2016 | May 31, 2016 | Dec. 31, 2015 | Apr. 30, 2015 | Mar. 31, 2015 | |
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 3,734 | $ 3,651 | |||
Debt issuance costs | (24) | (25) | |||
Less: current portion of long-term debt | 6 | 159 | |||
Total long-term debt, net of current portion | 3,728 | 3,492 | |||
3.20% Senior Notes Due 2016 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 0 | 150 | |||
Debt instrument, interest rate | 3.20% | 3.20% | |||
Debt instrument, maturity date | Apr. 1, 2016 | ||||
2.70% Senior Notes due April 2019 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 300 | 300 | |||
Debt instrument, interest rate | 2.70% | ||||
Debt instrument, maturity date | Apr. 1, 2019 | ||||
4.75% Senior Notes due January 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 521 | 522 | |||
Debt instrument, interest rate | 4.75% | ||||
Debt instrument, maturity date | Jan. 30, 2020 | ||||
2.50% Senior Notes due March 2020 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 299 | 299 | |||
Debt instrument, interest rate | 2.50% | 2.50% | |||
Debt instrument, maturity date | Mar. 30, 2020 | ||||
4.70% Senior Notes due 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 563 | 554 | |||
Debt instrument, interest rate | 4.70% | ||||
Debt instrument, maturity date | Apr. 1, 2021 | ||||
4.25% Senior Notes due April 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 307 | 313 | |||
Debt instrument, interest rate | 4.25% | ||||
Debt instrument, maturity date | Apr. 1, 2024 | ||||
3.50% Senior Notes due March 2025 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 568 | 601 | |||
Debt instrument, interest rate | 3.50% | 3.50% | |||
Debt instrument, maturity date | Mar. 30, 2025 | ||||
3.45% Senior Notes due June 2026 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 469 | 0 | |||
Debt instrument, interest rate | 3.45% | 3.45% | |||
Debt instrument, maturity date | Jun. 30, 2026 | ||||
6.95% Senior Notes Due 2037 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 174 | 247 | |||
Debt instrument, interest rate | 6.95% | ||||
Debt instrument, maturity date | Jul. 1, 2037 | ||||
5.75% Senior Notes Due 2040 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 244 | 368 | |||
Debt instrument, interest rate | 5.75% | ||||
Debt instrument, maturity date | Jan. 30, 2040 | ||||
4.70% Senior Notes due March 2045 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total long-term debt | $ 300 | 300 | |||
Debt instrument, interest rate | 4.70% | 4.70% | |||
Debt instrument, maturity date | Mar. 30, 2045 | ||||
Other [Member] | |||||
Debt Instrument [Line Items] | |||||
Other | $ 13 | $ 22 |
DEBT (Secured Receivables Credi
DEBT (Secured Receivables Credit Facility) (Narrative) (Details) - Secured Receivables Credit Facility [Member] - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 29, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||
Credit facility capacity | $ 600,000,000 | $ 525,000,000 | ||
Credit facility borrowing rate | 0.66% | 0.66% | ||
Letter of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Credit facility capacity | $ 100,000,000 |
DEBT (Senior Unsecured Revolvin
DEBT (Senior Unsecured Revolving Credit Facility) (Narrative) (Details) - Unsecured Senior Revolving Credit Facility [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Credit facility capacity | $ 750,000,000 | |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of LIBOR | 0.75% | |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of LIBOR | 1.63% | |
LIBOR [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate in excess of LIBOR | 1.125% | 1.125% |
Letter of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Credit facility capacity | $ 150,000,000 |
DEBT (Senior Notes Offering) (D
DEBT (Senior Notes Offering) (Details) - USD ($) | 1 Months Ended | ||
May 31, 2016 | Mar. 31, 2015 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Unamortized discount | $ 13,000,000 | ||
3.45% Senior Notes due June 2026 [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt | $ 500,000,000 | ||
Debt issuance cost | $ 4,000,000 | ||
Debt instrument, interest rate | 3.45% | 3.45% | |
Unamortized discount | $ 1,000,000 | ||
2015 Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt | $ 1,200,000,000 | ||
Debt issuance cost | 11,000,000 | ||
2.50% Senior Notes due March 2020 [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt | $ 300,000,000 | ||
Debt instrument, interest rate | 2.50% | 2.50% | |
Unamortized discount | $ 1,000,000 | ||
3.50% Senior Notes due March 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt | $ 600,000,000 | ||
Debt instrument, interest rate | 3.50% | 3.50% | |
4.70% Senior Notes due March 2045 [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt | $ 300,000,000 | ||
Debt instrument, interest rate | 4.70% | 4.70% |
DEBT (Retirement of Debt) (Narr
DEBT (Retirement of Debt) (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Apr. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Other Nonoperating (Income) Expense [Member] | |||||
Debt Instrument [Line Items] | |||||
Losses on extinguishment of debt | $ 48 | $ 144 | |||
6.95% Senior Notes due July 2037 and 5.75% Senior Notes due January 2040 [Member] | |||||
Debt Instrument [Line Items] | |||||
Extinguishment of debt, amount | $ 200 | $ 250 | |||
6.95% Senior Notes Due 2037 [Member] | |||||
Debt Instrument [Line Items] | |||||
Extinguishment of debt, amount | 73 | 176 | |||
Debt instrument, interest rate | 6.95% | ||||
5.75% Senior Notes Due 2040 [Member] | |||||
Debt Instrument [Line Items] | |||||
Extinguishment of debt, amount | $ 127 | $ 74 | |||
Debt instrument, interest rate | 5.75% | ||||
5.45% Senior Notes Due 2015 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 5.45% | ||||
3.20% Senior Notes Due 2016 [Member] | |||||
Debt Instrument [Line Items] | |||||
Extinguishment of debt, amount | $ 150 | ||||
Debt instrument, interest rate | 3.20% | 3.20% | |||
6.40% Senior Notes Due 2017 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest rate | 6.40% |
DEBT (Maturities of Long-Term D
DEBT (Maturities of Long-Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Instruments [Abstract] | ||
2,017 | $ 6 | |
2,018 | 4 | |
2,019 | 302 | |
2,020 | 801 | |
2,021 | 550 | |
Thereafter | 2,125 | |
Total maturities of debt | 3,788 | |
Unamortized discount | (13) | |
Debt issuance costs | (24) | $ (25) |
Fair value basis adjustments attributable to hedged debt | (17) | |
Total long-term debt | 3,734 | 3,651 |
Current portion of long-term debt | 6 | 159 |
Total long-term debt, net of current portion | $ 3,728 | $ 3,492 |
FINANCIAL INSTRUMENTS (Narrativ
FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 18 Months Ended | ||||||
Jul. 31, 2016 | May 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Jun. 30, 2015 | Dec. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Mar. 15, 2015 | Mar. 31, 2014 | Jul. 24, 2012 | |
Retired in Q1 2016 [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | $ 200 | ||||||||||
To be Retired in Q1 and Q2 2015 [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Face amount of debt | $ 1,300 | ||||||||||
Cash Flow Hedging [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Accumulated net loss from designated or qualifying cash flow hedges | $ 10 | $ 12 | |||||||||
Net amount of deferred gains and losses on cash flow hedges that is expected to be reclassified within the next 12 months | 3 | ||||||||||
Fair Value Hedging [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative, notional amount | $ 1,200 | $ 1,200 | |||||||||
Derivative asset designated as hedging instrument fair value on termination | $ 60 | ||||||||||
Proceeds received from terminated interest rate swaps for accrued interest | 6 | ||||||||||
Amount to be amortized as a reduction of interest expense | $ 54 | ||||||||||
Fair Value Hedging [Member] | One-Month LIBOR [Member] | Minimum [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Interest rate | 2.20% | 1.40% | |||||||||
Fair Value Hedging [Member] | One-Month LIBOR [Member] | Maximum [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Interest rate | 3.00% | 3.60% | |||||||||
Treasury Lock [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Gain (loss) on derivatives | $ (1) | $ 3 | |||||||||
Treasury Lock [Member] | Cash Flow Hedging [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative, notional amount | $ 250 | $ 350 | $ 350 | ||||||||
Forward Starting Interest Rate Swaps [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Gain (loss) on derivatives | $ (17) | ||||||||||
Forward Starting Interest Rate Swaps [Member] | Cash Flow Hedging [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative, notional amount | $ 150 | ||||||||||
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 | $ 71 | $ 65 | |||||||||
Reverse Treasury Locks [Member] | Economic Hedges [Member] | Not Designated as Hedging Instrument [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative, notional amount | 75 | $ 280 | |||||||||
Reverse Treasury Locks [Member] | Economic Hedges [Member] | Not Designated as Hedging Instrument [Member] | Other Nonoperating Income (Expense) [Member] | |||||||||||
Derivative [Line Items] | |||||||||||
Derivative instruments not designated as hedging instruments, gain | $ 1 | $ 3 |
FINANCIAL INSTRUMENTS (Summary
FINANCIAL INSTRUMENTS (Summary of Notional Amounts) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2016 | May 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | |
4.75% Senior Notes due January 2020 [Member] | ||||
Derivative [Line Items] | ||||
Debt instrument, interest rate | 4.75% | |||
Debt instrument, maturity date | Jan. 30, 2020 | |||
4.70% Senior Notes due April 2021 [Member] | ||||
Derivative [Line Items] | ||||
Debt instrument, interest rate | 4.70% | |||
Debt instrument, maturity date | Apr. 1, 2021 | |||
4.25% Senior Notes due April 2024 [Member] | ||||
Derivative [Line Items] | ||||
Debt instrument, interest rate | 4.25% | |||
Debt instrument, maturity date | Apr. 1, 2024 | |||
3.50% Senior Notes due March 2025 [Member] | ||||
Derivative [Line Items] | ||||
Debt instrument, interest rate | 3.50% | 3.50% | ||
Debt instrument, maturity date | Mar. 30, 2025 | |||
3.45% Senior Notes due June 2026 [Member] | ||||
Derivative [Line Items] | ||||
Debt instrument, interest rate | 3.45% | 3.45% | ||
Debt instrument, maturity date | Jun. 30, 2026 | |||
Fair Value Hedging [Member] | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 1,200 | $ 1,200 | ||
Fair Value Hedging [Member] | One-Month LIBOR [Member] | Minimum [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 2.20% | 1.40% | ||
Fair Value Hedging [Member] | One-Month LIBOR [Member] | Maximum [Member] | ||||
Derivative [Line Items] | ||||
Interest rate | 3.00% | 3.60% | ||
Fair Value Hedging [Member] | 4.75% Senior Notes due January 2020 [Member] | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 0 | $ 350 | ||
Fair Value Hedging [Member] | 4.70% Senior Notes due April 2021 [Member] | ||||
Derivative [Line Items] | ||||
Notional Amount | 0 | 400 | ||
Fair Value Hedging [Member] | 4.25% Senior Notes due April 2024 [Member] | ||||
Derivative [Line Items] | ||||
Notional Amount | 250 | 250 | ||
Fair Value Hedging [Member] | 3.50% Senior Notes due March 2025 [Member] | ||||
Derivative [Line Items] | ||||
Notional Amount | 600 | 200 | ||
Fair Value Hedging [Member] | 3.45% Senior Notes due June 2026 [Member] | ||||
Derivative [Line Items] | ||||
Notional Amount | $ 350 | $ 0 |
FINANCIAL INSTRUMENTS (Fair Val
FINANCIAL INSTRUMENTS (Fair Value of Derivatives) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value [Line Items] | ||
Total Net Derivatives (Liabilities) Assets | $ (88) | $ 17 |
Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives: | 0 | 23 |
Designated as Hedging Instrument [Member] | Interest Rate Swaps [Member] | Other Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives: | $ 88 | $ 6 |
STOCKHOLDERS_ EQUITY AND REDE78
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 3 Months Ended | 5 Months Ended | 12 Months Ended | |||||||||||||
Jun. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 11, 2016 | Mar. 31, 2016 | Sep. 30, 2015 | Jul. 01, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | May 04, 2006 | May 03, 2006 | |
Stockholders’ Equity and Redeemable Noncontrolling Interest [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 | $ 0.40 | $ 0.40 | $ 0.40 | $ 0.38 | $ 0.33 | $ 0.45 | $ 0.40 | $ 0.38 | $ 0.38 | $ 0.38 | $ 0.33 | $ 0.33 | $ 0.33 | ||||
Dividends per common share | $ 1.65 | $ 1.52 | $ 1.32 | ||||||||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 1,400 | ||||||||||||||||
Treasury stock value acquired cost method | $ 590 | $ 224 | $ 132 | ||||||||||||||
Reissuance of shares for employee benefit plan | 2,000,000 | 1,000,000 | 2,000,000 | ||||||||||||||
Sale of noncontrolling interest in subsidiary | $ 0 | $ 63 | $ 0 | ||||||||||||||
UMass Joint Venture [Member] | |||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||||||||||||||||
Ownership percentage by noncontrolling owners | 18.90% | ||||||||||||||||
Consideration | $ 68 | ||||||||||||||||
Redeemable noncontrolling interest | $ 77 | 70 | |||||||||||||||
Treasury Stock, at Cost | |||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||||||||||||||||
Purchases of treasury stock, shares | 7,400,000 | ||||||||||||||||
Treasury stock value acquired cost method | $ 590 | 224 | $ 132 | ||||||||||||||
Share Repurchases Open Market [Member] | |||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||||||||||||||||
Additional authorized amount | $ 1,000 | $ 500 | |||||||||||||||
Purchases of treasury stock, shares | 3,200,000 | 2,200,000 | |||||||||||||||
Treasury stock value acquired cost method | $ 224 | $ 132 | |||||||||||||||
Accelerated Share Repurchase Program [Member] | |||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||||||||||||||||
Treasury stock value acquired cost method | $ 250 | ||||||||||||||||
Accelerated Share Repurchase Program [Member] | Treasury Stock, at Cost | |||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||||||||||||||||
Purchases of treasury stock, shares | 2,800,000 | 300,000 | 3,100,000 | ||||||||||||||
Treasury stock acquired accelerated share repurchase, final purchase price, per share | $ 81.04 | ||||||||||||||||
Maximum [Member] | |||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||||||||||||||||
Preferred stock, shares authorized | 10,000,000 |
STOCKHOLDERS_ EQUITY AND REDE79
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST (Components of Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | $ (38) | ||
Net current period other comprehensive (loss) income | (34) | $ (11) | $ (19) |
Ending Balance | (72) | (38) | |
Foreign Currency Translation Adjustment [Member] | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | (24) | (9) | (2) |
Other comprehensive (loss) income before reclassifications | (34) | (15) | (7) |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 | 0 |
Net current period other comprehensive (loss) income | (34) | (15) | (7) |
Ending Balance | (58) | (24) | (9) |
Market Value Adjustment [Member] | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | (1) | (1) | 0 |
Other comprehensive (loss) income before reclassifications | (2) | 0 | (1) |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 | 0 |
Net current period other comprehensive (loss) income | (2) | 0 | (1) |
Ending Balance | (3) | (1) | (1) |
Net Deferred Loss on Cash Flow Hedges [Member] | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | (12) | (15) | (5) |
Other comprehensive (loss) income before reclassifications | 0 | 0 | (11) |
Amounts reclassified from accumulated other comprehensive (loss) income | 2 | 3 | 1 |
Net current period other comprehensive (loss) income | 2 | 3 | (10) |
Ending Balance | (10) | (12) | (15) |
Other [Member] | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | (1) | (2) | (1) |
Other comprehensive (loss) income before reclassifications | 0 | 1 | (1) |
Amounts reclassified from accumulated other comprehensive (loss) income | 0 | 0 | 0 |
Net current period other comprehensive (loss) income | 0 | 1 | (1) |
Ending Balance | (1) | (1) | (2) |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | (38) | (27) | (8) |
Other comprehensive (loss) income before reclassifications | (36) | (14) | (20) |
Amounts reclassified from accumulated other comprehensive (loss) income | 2 | 3 | 1 |
Net current period other comprehensive (loss) income | (34) | (11) | (19) |
Ending Balance | $ (72) | $ (38) | $ (27) |
STOCK OWNERSHIP AND COMPENSAT80
STOCK OWNERSHIP AND COMPENSATION PLANS (Employee and Non-employee Directors Stock Ownership Programs) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Employee Long Term Incentive Plan ELTIP [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 | ||
Number of shares available for award | 71,000 | ||
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 | ||
Restated Director Long-Term Incentive Plan (DLTIP) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for award | 2,400 | ||
Graded vesting period of the share-based award | 3 years | ||
Shares granted | 21 | 31 | 32 |
STOCK OWNERSHIP AND COMPENSAT81
STOCK OWNERSHIP AND COMPENSATION PLANS (Weighted Average Assumptions Used in Valuing Options Granted) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value at grant date | $ 10.35 | $ 11.57 | $ 10.99 |
Expected volatility | 21.60% | 21.00% | 25.10% |
Dividend yield | 2.40% | 2.10% | 2.10% |
Risk-free interest rate | 1.40% | 1.70% | |
Risk-free interest rate minimum | 1.60% | ||
Risk-free interest rate maximum | 2.00% | ||
Expected holding period, in years | 5 years 3 months 18 days | 5 years 3 months 18 days | |
Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected holding period, in years | 5 years 6 months | ||
Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected holding period, in years | 6 years 7 months 6 days |
STOCK OWNERSHIP AND COMPENSAT82
STOCK OWNERSHIP AND COMPENSATION PLANS (Transactions Under Stock Option Plans) (Details) - Stock Option [Member] - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options outstanding, beginning of year | 7.7 | ||
Options granted | 2.8 | ||
Exercise of stock options, shares | (1.3) | ||
Options forfeited and cancelled | (0.1) | ||
Options outstanding, end of year | 9.1 | 7.7 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Options outstanding, beginning of year weighted average exercise price | $ 59.65 | ||
Options, granted weighted average exercise price | 66.87 | ||
Options exercised weighted average exercise price | 56.17 | ||
Options forfeited and cancelled weighted average exercise price | 66.53 | ||
Options outstanding, end of year weighted average exercise price | $ 62.27 | $ 59.65 | |
Options outstanding, end of year weighted average remaining contractual term | 7 years 2 months 12 days | ||
Options outstanding, end of year aggregate intrinsic value | $ 269 | ||
Exercisable, end of year shares | 4.2 | ||
Exercisable, end of year weighted average exercise price | $ 57.84 | ||
Exercisable, end of year weighted average remaining contractual term | 5 years 8 months 12 days | ||
Exercisable, end of year aggregate intrinsic value | $ 144 | ||
Vested and expected to vest, end of year shares | 8.8 | ||
Vested and expected to vest, end of year weighted average exercise price | $ 62.10 | ||
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 | $ 262 | ||
Total intrinsic value of options exercised | 30 | $ 21 | $ 13 |
Compensation not yet recognized, stock options | $ 16 | ||
Unrecognized stock-based compensation cost weighted average period | 1 year 10 months 24 days |
STOCK OWNERSHIP AND COMPENSAT83
STOCK OWNERSHIP AND COMPENSATION PLANS (Activities Related to Stock Awards) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Stock-based compensation expense | $ 69 | $ 52 | $ 51 |
Stock Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Shares outstanding, beginning of year | 1.7 | 1.9 | 1.9 |
Shares granted | 0.6 | 0.6 | 0.7 |
Shares vested | (0.4) | (0.3) | (0.3) |
Shares forfeited and cancelled | (0.4) | (0.5) | (0.4) |
Shares outstanding, end of year | 1.5 | 1.7 | 1.9 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Shares outstanding, beginning of year weighted average grant date fair value | $ 59.92 | $ 55.50 | $ 57.08 |
Shares granted weighted average grant date fair value | 67.26 | 71.17 | 52.72 |
Shares vested weighted average grant date fair value | 58.98 | 55.74 | 57.14 |
Shares forfeited and cancelled weighted average grant date fair value | 57.31 | 58.18 | 56.44 |
Shares outstanding, end of year weighted average grant date fair value | $ 63.88 | $ 59.92 | $ 55.50 |
Unrecognized stock-based compensation cost | $ 33 | ||
Unrecognized stock-based compensation cost weighted average period | 1 year 10 months 24 days | ||
Total fair value of shares vested | $ 28 | $ 20 | $ 17 |
Stock-based compensation expense | 69 | 52 | 51 |
Income tax benefit related to stock-based compensation expense | $ 32 | $ 20 | $ 20 |
STOCK OWNERSHIP AND COMPENSAT84
STOCK OWNERSHIP AND COMPENSATION PLANS (Employee Stock Purchase Plan and Defined Contribution Plans) (Details) - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
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 | $ 76 | $ 77 | $ 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 | 9,000 | ||
Shares purchased by eligible employees under ESPP | 332 | 349 | 392 |
STOCK OWNERSHIP AND COMPENSAT85
STOCK OWNERSHIP AND COMPENSATION PLANS (Supplemental Deferred Compensation Plans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Amended company match percentage of employee contributions | 5.00% | |
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 | $ 51,000 | $ 49,000 |
Funds in a trust pertaining to all participant deferrals and company matching amounts related to the SDCP | $ 51,000 | 49,000 |
SDCP II [Member] | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Amended company match percentage of employee contributions | 25.00% | |
SDCP accrual | $ 39,000 | 36,000 |
SDCP salary deferral monetary | 20 | |
Deferred compensation arrangement with individual, employer contribution | $ 5 | |
SDCP II vesting period | 4 years | |
SDCP II graded vesting percentage | 25.00% | |
Cash surrender value of life insurance policies | $ 32,000 | $ 29,000 |
COMMITMENTS AND CONTINGENCIES86
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2016USD ($)Years | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Debt Instrument [Line Items] | ||||
2,017 | $ 179 | |||
2,018 | 129 | |||
2,019 | 92 | |||
2,020 | 64 | |||
2,021 | 44 | |||
Thereafter | 153 | |||
Minimum lease payments | 661 | |||
Operating leases, rent expense | 216 | $ 224 | $ 242 | |
Purchase obligation | 111 | |||
Purchase obligation in 2017 | 66 | |||
Purchase obligation in 2018 through 2019 | $ 21 | |||
Agreement to outsource billing and collection function | 10 years | |||
Remaining terms of lease obligations, maximum | Years | 31 | |||
Litigation reserves | $ 5 | 9 | ||
Self-insurance reserves | 117 | $ 124 | ||
Letter of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding, amount | $ 68 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Net revenues | $ 0 | $ 0 | $ 0 |
Income from discontinued operations before taxes | 0 | 0 | 1 |
Income tax benefit | 0 | 0 | (4) |
Income from discontinued operations, net of taxes | $ 0 | $ 0 | $ 5 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Percentage of net revenues from the DIS business | 90.00% | 90.00% | 90.00% | ||||||||
Total net revenues | $ 1,861 | $ 1,885 | $ 1,906 | $ 1,863 | $ 1,849 | $ 1,880 | $ 1,925 | $ 1,839 | $ 7,515 | $ 7,493 | $ 7,435 |
Total operating income | 1,277 | 1,399 | 983 | ||||||||
Non-operating expenses, net | (191) | (296) | (160) | ||||||||
Income from continuing operations before income taxes and equity in earnings of equity method investees | 1,086 | 1,103 | 823 | ||||||||
Income tax expense | (429) | (373) | (262) | ||||||||
Equity in earnings of equity method investees, net of taxes | 39 | 23 | 26 | ||||||||
Income from continuing operations | 167 | 205 | 209 | 115 | 200 | 354 | 129 | 70 | 696 | 753 | 587 |
Income from discontinued operations, net of taxes | 0 | 0 | 5 | ||||||||
Net income | 167 | 205 | 209 | 115 | 200 | 354 | 129 | 70 | 696 | 753 | 592 |
Less: net income attributable to noncontrolling interests | 12 | 13 | 14 | 12 | 12 | 12 | 11 | 9 | 51 | 44 | 36 |
Net income attributable to Quest Diagnostics | $ 155 | $ 192 | $ 195 | $ 103 | $ 188 | $ 342 | $ 118 | $ 61 | 645 | 709 | 556 |
Depreciation and amortization | 249 | 304 | 314 | ||||||||
Total capital expenditures | 293 | 263 | 308 | ||||||||
Routine clinical testing services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 4,179 | 4,078 | 4,066 | ||||||||
Gene-based and esoteric (including advanced diagnostics) testing services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 2,335 | 2,256 | 2,158 | ||||||||
Anatomic pathology testing services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 624 | 631 | 649 | ||||||||
All other services [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 377 | 528 | 562 | ||||||||
DIS business [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 7,138 | 6,965 | 6,873 | ||||||||
Total operating income | 1,244 | 1,118 | 1,068 | ||||||||
Depreciation and amortization | 170 | 212 | 206 | ||||||||
Total capital expenditures | 264 | 243 | 283 | ||||||||
All other operating segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 377 | 528 | 562 | ||||||||
Total operating income | 64 | 110 | 94 | ||||||||
Depreciation and amortization | 6 | 10 | 13 | ||||||||
Total capital expenditures | 21 | 16 | 17 | ||||||||
General corporate income (expenses), Net [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total operating income | (31) | 171 | (179) | ||||||||
Depreciation and amortization | 73 | 82 | 95 | ||||||||
Total capital expenditures | $ 8 | $ 4 | $ 8 |
RELATED PARTIES (Details)
RELATED PARTIES (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Equity Method Investee [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable, related parties | $ 9 | $ 9 |
Equity Method Investee [Member] | ||
Related Party Transaction [Line Items] | ||
Revenue from related parties | 33 | 30 |
Accounts receivable, related parties | 10 | 5 |
Equity Method Investee [Member] | Prepaid Expenses and Other Current Assets [Member] | ||
Related Party Transaction [Line Items] | ||
Other accounts receivable, related parties | 5 | 32 |
Equity Method Investee [Member] | Selling, General and Administrative Expenses [Member] | ||
Related Party Transaction [Line Items] | ||
Income recognized from related party | $ 19 | $ 31 |
Quarterly Operating Results (90
Quarterly Operating Results (unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Data [Abstract] | |||||||||||
Net revenues | $ 1,861 | $ 1,885 | $ 1,906 | $ 1,863 | $ 1,849 | $ 1,880 | $ 1,925 | $ 1,839 | $ 7,515 | $ 7,493 | $ 7,435 |
Gross profit | 701 | 728 | 751 | 719 | 699 | 718 | 743 | 676 | 2,899 | 2,836 | |
Income from continuing operations | 167 | 205 | 209 | 115 | 200 | 354 | 129 | 70 | 696 | 753 | 587 |
Income (loss) from discontinued operations, net of taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 5 |
Net income | 167 | 205 | 209 | 115 | 200 | 354 | 129 | 70 | 696 | 753 | 592 |
Less: net income attributable to noncontrolling interests | 12 | 13 | 14 | 12 | 12 | 12 | 11 | 9 | 51 | 44 | 36 |
Net income attributable to Quest Diagnostics | 155 | 192 | 195 | 103 | 188 | 342 | 118 | 61 | 645 | 709 | 556 |
Income from continuing operations | $ 155 | $ 192 | $ 195 | $ 103 | $ 188 | $ 342 | $ 118 | $ 61 | $ 645 | $ 709 | $ 551 |
Income from continuing operations | $ 1.11 | $ 1.37 | $ 1.38 | $ 0.72 | $ 1.31 | $ 2.37 | $ 0.82 | $ 0.42 | $ 4.58 | $ 4.92 | $ 3.80 |
Income (loss) from discontinued operations, per basic share | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0.03 |
Net income | 1.11 | 1.37 | 1.38 | 0.72 | 1.31 | 2.37 | 0.82 | 0.42 | 4.58 | 4.92 | 3.83 |
Income from continuing operations | 1.09 | 1.34 | 1.37 | 0.71 | 1.29 | 2.35 | 0.81 | 0.42 | 4.51 | 4.87 | 3.78 |
Income (loss) from discontinued operations, per diluted share | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0.03 |
Net income | $ 1.09 | $ 1.34 | $ 1.37 | $ 0.71 | $ 1.29 | $ 2.35 | $ 0.81 | $ 0.42 | $ 4.51 | $ 4.87 | $ 3.81 |
Quarterly Operating Results (91
Quarterly Operating Results (unaudited) (Narrative) (Details) - USD ($) $ in Millions | May 13, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring and integration charges | $ 24 | $ 18 | $ 19 | $ 21 | $ 22 | $ 34 | $ 23 | $ 31 | ||||
Pre-tax gain (loss) recognized | $ 118 | $ 334 | $ 0 | |||||||||
Gain on escrow recovery | 21 | |||||||||||
Deferred income tax expense (benefit) | 37 | 112 | 23 | |||||||||
Income tax (benefit) expense | 429 | 373 | $ 262 | |||||||||
Subsidiaries [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Deferred income tax expense (benefit) | (58) | $ (58) | ||||||||||
Clinical Trials [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Pre-tax gain (loss) recognized | 334 | |||||||||||
Summit Health, Inc. [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Business acquisition, decrease of contingent consideration | 13 | |||||||||||
Focus Diagnostics Products [Member] | Disposal Group, Held-for-sale, Not Discontinued Operations [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Pre-tax gain (loss) recognized | 118 | 118 | ||||||||||
Deferred income tax expense (benefit) | $ (7) | (7) | ||||||||||
Income tax (benefit) expense | $ 84 | $ 84 | ||||||||||
Retirement of Debt [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Losses on extinguishment of debt | 48 | 65 | 79 | |||||||||
Cost of Services [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring and integration charges | 15 | 8 | 10 | 7 | 12 | 20 | 11 | 20 | ||||
Selling, general and administrative [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring and integration charges | 7 | $ 10 | 8 | 12 | 10 | 9 | 12 | 11 | ||||
Selling, general and administrative [Member] | Legal Matters [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Legal costs | 1 | 2 | 10 | 5 | 2 | |||||||
Other Operating (Income) Expense [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring and integration charges | 1 | |||||||||||
Impairment charges | 6 | 1 | $ 11 | $ 5 | $ 8 | |||||||
Non-cash Asset Impairment Charges [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Non-cash asset impairment charges | 6 | 1 | ||||||||||
Equity in Earnings of Equity Method Investees [Member] | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring and integration charges | $ 1 | $ 1 | $ 2 | $ 5 |
Schedule II - Valuation Accou92
Schedule II - Valuation Accounts and Reserves (Details) - Allowance for Doubtful Accounts [Member] - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | $ 254 | $ 250 | $ 236 |
Provision for doubtfull accounts | 308 | 297 | 296 |
Net deductions and other | 297 | 293 | 282 |
Ending balance | $ 265 | $ 254 | $ 250 |