Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2020 | Jan. 31, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-12215 | ||
Entity Registrant Name | Quest Diagnostics Inc | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 16-1387862 | ||
Entity Address, Address Line One | 500 Plaza Drive | ||
Entity Address, City or Town | Secaucus, | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07094 | ||
City Area Code | (973) | ||
Local Phone Number | 520-2700 | ||
Title of 12(b) Security | Common Stock, $.01 par value | ||
Trading Symbol | DGX | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 15.2 | ||
Entity Common Stock, Shares Outstanding | 133,454,761 | ||
Documents Incorporated by Reference | Portions of the registrant's Proxy Statement to be filed by April 30, 2021 | ||
Entity Central Index Key | 0001022079 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
ICFR Auditor Attestation Flag | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) shares in Millions, $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 1,158 | $ 1,192 |
Accounts receivable, net of allowance for credit losses of $28 and $15 as of December 31, 2020 and 2019, respectively | 1,520 | 1,063 |
Inventories | 223 | 123 |
Prepaid expenses and other current assets | 157 | 112 |
Total current assets | 3,058 | 2,490 |
Property, plant and equipment, net | 1,627 | 1,453 |
Operating lease right-of-use assets | 604 | 518 |
Goodwill | 6,873 | 6,619 |
Intangible assets, net | 1,167 | 1,121 |
Investments in equity method investees | 521 | 482 |
Other assets | 176 | 160 |
Total assets | 14,026 | 12,843 |
Liabilities and Stockholders' Equity | ||
Accounts payable and accrued expenses | 1,633 | 1,041 |
Less: Current portion of long-term debt | 2 | 804 |
Current portion of long-term operating lease liabilities | 141 | 145 |
Total current liabilities | 1,776 | 1,990 |
Long-term debt | 4,013 | 3,966 |
Long-term operating lease liabilities | 499 | 413 |
Other liabilities | 847 | 711 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 82 | 76 |
Quest Diagnostics stockholders’ equity: | ||
Common stock, par value $0.01 per share; 600 shares authorized as of both December 31, 2020 and 2019; 217 shares issued as of both December 31, 2020 and 2019 | 2 | 2 |
Additional paid-in capital | 2,841 | 2,722 |
Retained earnings | 9,303 | 8,174 |
Accumulated other comprehensive (loss) income | (21) | (39) |
Treasury stock, at cost; 84 shares as of both December 31, 2020 and 2019 | (5,366) | (5,218) |
Total Quest Diagnostics stockholders' equity | 6,759 | 5,641 |
Noncontrolling interests | 50 | 46 |
Total stockholders' equity | 6,809 | 5,687 |
Total liabilities and stockholders' equity | $ 14,026 | $ 12,843 |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Treasury stock, shares | 84 | 84 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 28 | $ 15 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600 | 600 |
Common stock, shares issued | 217 | 217 |
Treasury stock, shares | 84 | 84 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
Net revenues | $ 9,437 | $ 7,726 | $ 7,531 |
Operating costs and expenses and other operating expense (income): | |||
Cost of services | 5,804 | 5,037 | 4,926 |
Selling, general and administrative | 1,550 | 1,457 | 1,424 |
Amortization of intangible assets | 103 | 96 | 90 |
Other operating expense (income), net | 9 | (95) | (10) |
Total operating costs and expenses, net | 7,466 | 6,495 | 6,430 |
Operating income | 1,971 | 1,231 | 1,101 |
Other income (expense): | |||
Interest expense, net | (163) | (175) | (167) |
Other income (expense), net | 76 | 20 | (8) |
Total non-operating expenses, net | (87) | (155) | (175) |
Income from continuing operations before income taxes and equity in earnings of equity method investees | 1,884 | 1,076 | 926 |
Income tax expense | (460) | (247) | (182) |
Equity in earnings of equity method investees, net of taxes | 75 | 57 | 44 |
Income from continuing operations | 1,499 | 886 | 788 |
Income from discontinued operations, net of taxes | 0 | 20 | 0 |
Net income | 1,499 | 906 | 788 |
Less: Net income attributable to noncontrolling interests | 68 | 48 | 52 |
Net income attributable to Quest Diagnostics | 1,431 | 858 | 736 |
Amounts attributable to Quest Diagnostics’ common stockholders: | |||
Income from continuing operations | 1,431 | 838 | 736 |
Income from discontinued operations, net of taxes | 0 | 20 | 0 |
Net income attributable to Quest Diagnostics | $ 1,431 | $ 858 | $ 736 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: | |||
Income from continuing operations (in dollars per share) | $ 10.62 | $ 6.21 | $ 5.39 |
Income from discontinued operations (in dollars per share) | 0 | 0.15 | 0 |
Net income (in dollars per share) | 10.62 | 6.36 | 5.39 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: | |||
Income from continuing operations (in dollars per share) | 10.47 | 6.13 | 5.29 |
Income from discontinued operations (in dollars per share) | 0 | 0.15 | 0 |
Net income (in dollars per share) | $ 10.47 | $ 6.28 | $ 5.29 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 1,499 | $ 906 | $ 788 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | 15 | 7 | (11) |
Net change in available-for-sale debt securities, net of taxes | 0 | 8 | 0 |
Net deferred gain on cash flow hedges, net of taxes | 3 | 5 | 2 |
Other comprehensive income (loss) | 18 | 20 | (9) |
Comprehensive income | 1,517 | 926 | 779 |
Less: Comprehensive income attributable to noncontrolling interests | 68 | 48 | 52 |
Comprehensive income attributable to Quest Diagnostics | $ 1,449 | $ 878 | $ 727 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income | $ 1,499 | $ 906 | $ 788 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 361 | 329 | 309 |
Provision for credit losses | 19 | 11 | 6 |
Deferred income tax provision | 85 | 15 | 73 |
Stock-based compensation expense | 97 | 56 | 61 |
Losses (gains) on sale of property, plant and equipment | 3 | (70) | 6 |
Other, net | (81) | (39) | 6 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (455) | (63) | (65) |
Accounts payable and accrued expenses | 452 | 73 | (19) |
Income taxes payable | 22 | 29 | 4 |
Termination of interest rate swap agreements | 40 | 0 | 0 |
Other assets and liabilities, net | (37) | (4) | 31 |
Net cash provided by operating activities | 2,005 | 1,243 | 1,200 |
Cash flows from investing activities: | |||
Business acquisitions, net of cash acquired | (330) | (58) | (421) |
Proceeds from disposition of property, plant, and equipment | 3 | 91 | 2 |
Capital expenditures | (418) | (400) | (383) |
(Increase) decrease in investments and other assets | (27) | (44) | 1 |
Net cash used in investing activities | (772) | (411) | (801) |
Cash flows from financing activities: | |||
Proceeds from borrowings | 749 | 2,281 | 2,090 |
Repayments of debt | (1,554) | (1,449) | (1,966) |
Purchases of treasury stock | (325) | (353) | (322) |
Exercise of stock options | 189 | 119 | 99 |
Employee payroll tax withholdings on stock issued under stock-based compensation plans | (15) | (16) | (21) |
Dividends paid | (297) | (286) | (266) |
Distributions to noncontrolling interest partners | (58) | (54) | (54) |
Contributions from noncontrolling interest partners | 0 | 0 | 16 |
Other financing activities, net | 44 | (17) | 23 |
Net cash (used in) provided by financing activities | (1,267) | 225 | (401) |
Net change in cash and cash equivalents and restricted cash | (34) | 1,057 | (2) |
Cash and cash equivalents and restricted cash, beginning of year | 1,192 | 135 | 137 |
Cash and cash equivalents and restricted cash, end of year | $ 1,158 | $ 1,192 | $ 135 |
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, 2017 | $ 4,955 | $ 2 | $ 2,612 | $ 7,138 | $ (48) | $ (4,783) | $ 34 |
Balance, shares at Dec. 31, 2017 | 135 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 781 | 736 | 45 | ||||
Other comprehensive income (loss), net of tax | (9) | (9) | |||||
Dividends declared | (274) | (274) | |||||
Distributions to noncontrolling interest partners | (44) | (44) | |||||
Issuance of common stock under benefit plans | 28 | 14 | 14 | ||||
Stock-based compensation expense | 61 | 56 | 5 | ||||
Exercise of stock options, value | 99 | 6 | 93 | ||||
Exercise of stock options, shares | 3 | ||||||
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans | (21) | (21) | |||||
Purchases of treasury stock, value | (325) | $ (325) | |||||
Purchases of treasury stock, shares | (3) | (3.4) | |||||
Contributions from noncontrolling interest partners | 16 | 16 | |||||
Reclassification of stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act | 0 | 2 | (2) | ||||
Balance, value at Dec. 31, 2018 | 5,267 | $ 2 | 2,667 | 7,602 | (59) | $ (4,996) | 51 |
Balance, shares at Dec. 31, 2018 | 135 | ||||||
Balance, value at Dec. 31, 2017 | 80 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net income | 7 | ||||||
Distributions to noncontrolling interest partners | (10) | ||||||
Balance, value at Dec. 31, 2018 | 77 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 900 | 858 | 42 | ||||
Other comprehensive income (loss), net of tax | 20 | 20 | |||||
Dividends declared | (286) | (286) | |||||
Distributions to noncontrolling interest partners | (47) | (47) | |||||
Issuance of common stock under benefit plans | 24 | 9 | 15 | ||||
Stock-based compensation expense | 56 | 55 | 1 | ||||
Exercise of stock options, value | 119 | 7 | 112 | ||||
Exercise of stock options, shares | 2 | ||||||
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans | (16) | (16) | |||||
Purchases of treasury stock, value | (350) | $ (350) | |||||
Purchases of treasury stock, shares | (4) | (3.5) | |||||
Balance, value at Dec. 31, 2019 | 5,687 | $ 2 | 2,722 | 8,174 | (39) | $ (5,218) | 46 |
Balance, shares at Dec. 31, 2019 | 133 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net income | 6 | ||||||
Distributions to noncontrolling interest partners | (7) | ||||||
Balance, value at Dec. 31, 2019 | 76 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 1,484 | 1,431 | 53 | ||||
Other comprehensive income (loss), net of tax | 18 | 18 | |||||
Dividends declared | (302) | (302) | |||||
Distributions to noncontrolling interest partners | (49) | (49) | |||||
Issuance of common stock under benefit plans | 25 | 11 | 14 | ||||
Issuance of common stock under benefit plans, sharers | 1 | ||||||
Stock-based compensation expense | 97 | 97 | |||||
Exercise of stock options, value | 189 | 26 | 163 | ||||
Exercise of stock options, shares | 2 | ||||||
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans | (15) | (15) | |||||
Purchases of treasury stock, value | (325) | $ (325) | |||||
Purchases of treasury stock, shares | (3) | (2.7) | |||||
Balance, value at Dec. 31, 2020 | 6,809 | $ 2 | $ 2,841 | $ 9,303 | $ (21) | $ (5,366) | $ 50 |
Balance, shares at Dec. 31, 2020 | 133 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net income | 15 | ||||||
Distributions to noncontrolling interest partners | (9) | ||||||
Balance, value at Dec. 31, 2020 | $ 82 |
DESCRIPTION OF BUSINESS
DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2020 | |
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 information and insights based on the industry-leading menu of routine, non-routine and advanced clinical testing and anatomic pathology testing, and other diagnostic information services. The Company provides services to a broad range of customers, including patients, clinicians, hospitals, independent delivery networks ("IDNs"), health plans, employers, accountable care organizations ("ACOs"), and direct contract entities ("DCEs"). 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 and the Company's connectivity resources, including call centers and mobile paramedics, nurses and other health and wellness professionals. The Company is the world's leading provider of diagnostic information services. The Company provides interpretive consultation with one of the largest medical and scientific staffs in the industry. The Company's Diagnostic Solutions businesses ("DS") are the leading provider of risk assessment services for the life insurance industry and offer healthcare organizations and clinicians robust information technology solutions. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
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. Additionally, the consolidated financial statements include the accounts of variable interest entities (“VIEs”) in which the Company has a variable interest and for which the Company is the “primary beneficiary” as it has both: (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE. All significant intercompany accounts and transactions are eliminated in consolidation. Income attributable to the minority interest in the Company's majority owned and controlled consolidated subsidiaries is recorded as net income attributable to noncontrolling interests in the consolidated statements of operations and the noncontrolling interest is reflected as a separate component of consolidated stockholders' equity in the consolidated balance sheet. Basis of Presentation During the third quarter of 2006, the Company completed the wind down of Nichols Institute Diagnostics ("NID"), a test kit manufacturing subsidiary. The accompanying consolidated statements of operations and related disclosures report the results of NID as discontinued operations through 2019, at which point certain income tax contingencies related to NID were resolved. See Note 21 for a further discussion of discontinued operations. Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. 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 sheet. 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. 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 recognizes as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods sold or services rendered primarily upon completion of the testing process (when results are reported) or when services have been rendered (see Note 3). Net revenues from Medicare and Medicaid programs were approximately 11%, 15% and 16% of the Company's consolidated net revenues for the years ended December 31, 2020, 2019 and 2018, respectively. 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 attributable to Quest Diagnostics, 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 attributable to Quest Diagnostics, 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 measures stock-based compensation for equity awards at fair value on the date of grant and 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 units allow the recipients of such awards to earn a variable number of shares based on the achievement of the performance goals, which are based on the financial performance of the Company and the total shareholder return of the Company relative to an index of peer companies ("relative TSR"), specified in the awards. For performance share units with a goal based on the financial performance of the Company, stock-based compensation expense 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 for these awards is recognized as compensation cost in earnings in the period of the change. For performance share units with a market-based relative TSR goal, stock-based compensation expense is recognized based on the estimated fair value of the award regardless of the actual number of shares earned. For further details regarding stock-based compensation, see Note 17. 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 expense (income), net in the consolidated statements of operations. Foreign currency 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 timely. As of December 31, 2020 and 2019, receivables due from government payers under the Medicare and Medicaid programs represented approximately 6% and 11%, 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 December 31, 2020 and 2019, receivables due from patients represented approximately 11% and 20%, respectively, of the Company's consolidated net accounts receivable. The Company applies assumptions and judgments including historical collection experience (including the period the receivables have been outstanding) for assessing collectability and determining net revenues and accounts receivable from patients. Accounts Receivable and Allowance for Credit Losses Accounts receivable are reported net of allowances for credit losses. When estimating its allowance for credit losses, the Company pools its trade receivables based on the following customer types: healthcare insurers, government payers, client payers and patients, which are described in Note 3. The Company principally estimates the allowance for credit losses by pool based on historical collection experience, the current credit worthiness of the customers, current economic conditions, expectations of future economic conditions and the period that the receivables have been outstanding. To the extent that any individual payers are identified that have deteriorated in credit quality, the Company removes the customers from their respective pools and establishes allowances based on the individual risk characteristics of such customers. Inventories Inventories, which consist principally of finished goods testing supplies and reagents, are valued at the lower of cost (first in, first out method) or net realizable value. 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, 2020 as follows: • buildings and improvements, ranging up to thirty-one and a half years; • laboratory equipment and furniture and fixtures, ranging from five • 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 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 exceeds its fair value. On a quarterly basis, the Company performs a review of its 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 goodwill test is performed at least annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. 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; the qualitative test may be performed prior to, or as an alternative to, performing a 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 the Company is required to perform the quantitative goodwill impairment test. Otherwise, no further analysis is required. Additionally, the Company's policy is to update the fair value calculation of its reporting units and perform the quantitative goodwill impairment test on a periodic basis. The quantitative impairment test involves the comparison of the fair value of the reporting unit to its carrying value. The Company calculates the fair value of each reporting unit using either (i) a discounted cash flows analysis that converts future cash flow amounts into a single discounted present value amount or (ii) a market approach. The Company assesses the valuation methodology based upon the relevance and availability of the data at the time that the valuation is performed. The Company 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, an impairment loss will be recognized in the amount of the excess. The Company performs its annual impairment test during the fourth quarter of the fiscal year. For the year ended December 31, 2020, in accordance with its policy to perform the quantitative test on a periodic basis, the Company updated the fair value calculation of its reporting units, performed the quantitative impairment test and concluded that goodwill was not impaired. For the year ended December 31, 2019, the Company performed a qualitative impairment test and, based on the totality of information available for the reporting units, the Company concluded that it was more-likely-than-not that the estimated fair values of the reporting units were greater than the carrying values of the reporting units and, as such, no further analysis was required. Intangible Assets Intangible assets are recognized at fair value, as an asset apart from goodwill if the asset (i) arises from contractual or other legal rights, or (ii) 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 lives, which generally range from five 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 an indefinite-lived intangible 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 quarters of the years ended December 31, 2020 and 2019, 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 these 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 (except for those accounted for under the equity method of accounting), are included in other assets in the consolidated balance sheet and include: • Equity investments with readily determinable fair values which are comprised of 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 17). These investments are measured at fair value with both realized and unrealized gains and losses recorded in current earnings within other income (expense), net in the consolidated statements of operations. For the years ended December 31, 2020, 2019 and 2018, gains and (losses) from these equity securities totaled $8 million, $10 million, and $(2) million, respectively. The carrying value of these investments were $67 million and $59 million at December 31, 2020 and 2019, respectively. • Equity investments that do not have readily determinable fair values, which consist of investments in preferred and common shares of privately held companies. These investments are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The Company regularly evaluates these equity investments to determine if there are any indicators that the investment is impaired; no impairment charges were recognized related to these investments for the years ended December 31, 2020, 2019, and 2018. The carrying value of these investments was $25 million at both December 31, 2020 and 2019. • Available-for-sale debt securities of privately-held companies. These investments are measured at fair value with unrealized gains and losses presented in other comprehensive income (loss). The carrying amount of these investments was $12 million at both December 31, 2020 and 2019. 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 historically entered into interest rate swap agreements. Interest rate swap agreements 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, net. 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 including certain financial information and certain assumptions regarding past, present and future market conditions. For a derivative instrument that has been formally designated as a fair value hedge, fair value gains or losses on the derivative instrument along with offsetting fair value gains or losses on the hedged item that are attributable to the risk being hedged are reported in other income (expense), net in the consolidated statements of operations. For derivatives that have been formally designated as a cash flow hedge, the change in the fair value of the derivatives is recorded in accumulated other comprehensive loss. Upon maturity or early termination of an effective interest rate swap agreement 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. After the initial quantitative assessment, this analysis is initially performed on a qualitative basis and, if it is determined that the hedging relationship was and continues to be highly effective, no further analysis is required. 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: • Foreign currency translation adjustments; • Net changes in available-for-sale debt securities, which represent unrealized holding gains (losses), net of tax, on available-for-sale debt securities; and • Net deferred gains (losses) on cash flow hedges, which represent deferred gains (losses), net of tax, on interest rate-related derivative financial instruments designated as cash flow hedges, net of amounts reclassified to interest expense (see Notes 15 and 16). New Accounting Standards Adoption of New Accounting Standards On January 1, 2020, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board ("FASB") which aligns the requirements for deferring implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The adoption of this standard, which the Company elected to do on a prospective basis, did not have a material impact on the Company's consolidated results of operations, financial position or cash flows. On January 1, 2020, the Company adopted a new accounting standard issued by the FASB 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 requires entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. The adoption of this new standard, which was done using a modified retrospective transition approach, did not have a material impact on the Company's consolidated results of operations, financial position or cash flows. See "Accounts Receivable and Allowance for Credit Losses" in this footnote for further details on the Company's allowance for credit losses policy. On January 1, 2019, the Company adopted a new accounting standard issued by the FASB on accounting for leases using the modified retrospective method. This new accounting standard requires a lessee to recognize on its balance sheet an asset and liability for most leases. The Company elected the optional transition method that allowed for a cumulative-effect adjustment to the opening balance of retained earnings recorded on January 1, 2019 and did not restate previously reported results in the comparative periods. The Company also elected the package of practical expedients, which among other things, allowed it to carry forward its historical lease classification. As a result of adoption of the new standard, the Company recorded operating lease assets and lease liabilities of approximately $500 million and $550 million, respectively as of January 1, 2019. The operating lease liability was determined based on the present value of the remaining minimum rental payments and the operating lease asset was determined based on the value of the lease liability, adjusted for the deferred rent balances of approximately $50 million, which were previously included in accounts payable and accrued expenses as well as other liabilities in the consolidated balance sheet. Accounting for the Company's finance leases remained substantially unchanged. The adoption of the new standard did not materially impact the Company's consolidated results of operations or cash flows. In addition, the adoption of this new accounting standard resulted in increased qualitative and quantitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases. For further details, see Note 14. New Accounting Standards To Be Adopted |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION DIS Net revenues in the Company’s DIS business accounted for greater than 95% of the Company’s total net revenues for the years ended December 31, 2020, 2019 and 2018 and are primarily comprised of a high volume of relatively low-dollar transactions. The DIS business, which provides clinical testing services and other services, satisfies its performance obligation and recognizes revenues primarily upon completion of the testing process (when results are reported) or when services have been rendered. The Company estimates the amount of consideration it expects to be entitled to receive from customer groups in exchange for providing services using the portfolio approach. These estimates include the impact of contractual allowances (including payer denials), and patient price concessions, as discussed below. The portfolios determined using the portfolio approach consist of the following groups of customers: healthcare insurers, government payers, client payers and patients. Contracts with customers in the DIS business do not contain significant financing components based on the typical period of time between performance of services and collection of consideration. The process for estimating revenues and the ultimate collection of accounts receivable involves significant judgment and estimation. The Company follows a standard process, which considers historical denial and collection experience and other factors (including the period the receivables have been outstanding), to estimate contractual allowances and implicit price concessions, recording adjustments in the current period as changes in estimates. Further adjustments to the allowances, based on actual receipts, may be recorded upon settlement. The following are descriptions of the DIS business’ portfolios: Healthcare Insurers Reimbursements from healthcare insurers are based on negotiated fee-for-service schedules and on capitated payment rates. Under fee-for-service arrangements, healthcare insurers are billed at the Company's list price. Net revenues recognized consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical denial and collection experience and the terms of the Company’s contractual arrangements. Collection of the Company's net revenues from healthcare insurers is normally a function of providing complete and correct billing information to the healthcare insurers within the various filing deadlines and generally occurs within 30 to 60 days of billing. Provided the Company has billed healthcare insurers accurately with complete information prior to the established filing deadline, there has historically been little to no credit risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and if so, it will reserve accordingly for the billing. 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. Healthcare insurers typically reimburse the Company under capitated arrangements in the same month services are performed, essentially giving rise to no outstanding accounts receivable at the end of a reporting period. If any capitated payments are not received on a timely basis, the Company determines the cause and makes a separate determination as to whether or not the collection of the amount from the healthcare insurer is at risk and, if so, would reserve accordingly. Government Payers Reimbursements from government payers are based on fee-for-service schedules set by governmental authorities, including traditional Medicare and Medicaid. Net revenues recognized consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical denial and collection experience and other factors. Collection of the Company's net revenues from government payers is normally a function of providing the complete and correct billing information within the various filing deadlines and generally occurs within 30 days of billing. Provided the Company has billed government payers accurately with complete information prior to the established filing deadline, there has historically been little to no credit risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and, if so, it will reserve for the billing accordingly. Client Payers Client payers include physicians, hospitals, ACOs, DCEs, IDNs, employers, other commercial laboratories and institutions for which services are performed on a wholesale basis, and are billed based on negotiated fee schedules. Credit risk and ability to pay are more of a consideration for these payers than healthcare insurers and government payers. Collection of consideration the Company expects to receive generally occurs within 60 to 90 days of billing. The Company principally estimates the allowance for credit losses for client payers based on historical collection experience, the current credit worthiness of the customers, current economic conditions, expectations of future economic conditions and the period that the receivables have been outstanding. To the extent that any individual client payers are identified that have deteriorated in credit quality, the Company establishes allowances based on the individual risk characteristics of such customers. Patients Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients. Insured patients (includes coinsurance and deductible responsibilities) are billed based on fees negotiated with healthcare insurers. Collection of billings from patients is subject to credit risk and ability of the patients to pay. Net revenues consist of amounts billed net of discounts provided to uninsured patients in accordance with the Company’s policies and implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive from patients, which considers historical collection experience (including the period the receivables have been outstanding) and other factors including current market conditions. Patient billings are generally fully reserved for when the related billing reaches 210 days outstanding. Balances are automatically written off when they are sent to collection agencies. Allowances are further adjusted for estimated recoveries of amounts sent to collection agencies based on historical collection experience, which is regularly monitored. Collection of consideration the Company expects to receive generally occurs within 30 to 60 days of billing. DS The Company’s DS businesses primarily satisfy their performance obligations and recognize revenues when delivery has occurred or services have been rendered. Collection of consideration the Company expects to receive generally occurs within 30 to 60 days of billing. The approximate percentage of net revenue by type of customer was as follows: Year Ended December 31, 2020 2019 2018 Healthcare insurers: Fee-for-service 34 % 33 % 32 % Capitated 3 3 3 Total healthcare insurers 37 36 35 Government payers 11 15 16 Client payers 38 32 32 Patients 11 13 13 Total DIS 97 96 96 DS 3 4 4 Net revenues 100 % 100 % 100 % For the years ended December 31, 2020, 2019 and 2018, substantially all of the Company’s services were provided within the United States, see Note 19. The approximate percentage of net accounts receivable by type of customer as of December 31, 2020 and 2019 was as follows: 2020 2019 Healthcare insurers 34% 22% Government payers 6 11 Client payers 46 42 Patients (including coinsurance and deductible responsibilities) 11 20 Total DIS 97 95 DS 3 5 Net accounts receivable 100% 100% The following table summarizes the activity for the Company's allowance for credit losses during the year ended December 31, 2020, which principally relates to client payers: Allowance for Credit Losses Balance, January 1, 2020 $ 15 Provision for credit losses 19 Write-offs of accounts receivable, net of recoveries (6) Balance, December 31, 2020 $ 28 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2020 | |
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): 2020 2019 2018 Amounts attributable to Quest Diagnostics’ common stockholders: Income from continuing operations $ 1,431 $ 838 $ 736 Income from discontinued operations, net of taxes — 20 — Net income attributable to Quest Diagnostics' common stockholders $ 1,431 $ 858 $ 736 Income from continuing operations $ 1,431 $ 838 $ 736 Less: Earnings allocated to participating securities 6 3 3 Earnings available to Quest Diagnostics’ common stockholders – basic and diluted $ 1,425 $ 835 $ 733 Weighted average common shares outstanding – basic 134 134 136 Effect of dilutive securities: Stock options and performance share units 2 2 3 Weighted average common shares outstanding – diluted 136 136 139 Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: Income from continuing operations $ 10.62 $ 6.21 $ 5.39 Income from discontinued operations — 0.15 — Net income $ 10.62 $ 6.36 $ 5.39 Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: Income from continuing operations $ 10.47 $ 6.13 $ 5.29 Income from discontinued operations — 0.15 — Net income $ 10.47 $ 6.28 $ 5.29 The following securities were not included in the calculation of diluted earnings per share due to their antidilutive effect: 2020 2019 2018 Stock options and performance share units 1 3 2 |
RESTRUCTURING ACTIVITIES
RESTRUCTURING ACTIVITIES | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING ACTIVITIES | RESTRUCTURING ACTIVITIES Invigorate Program The Company is committed to a program called Invigorate which is designed to reduce its cost structure and improve performance. Invigorate consists 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 revenue services excellence. In addition to these programs, the Company identified key themes to change how it operates including reducing denials and patient price concessions; further digitizing the business; standardization and automation; and optimization initiatives in the areas of lab network and patient service center network. The Invigorate program is 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 the Company to improve service quality and operating profitability. Restructuring Charges The following table provides a summary of the Company's pre-tax restructuring charges for the years ended December 31, 2020, 2019 and 2018: 2020 2019 2018 Employee separation costs $ 14 $ (3) $ 45 Facility-related costs — 1 4 Asset impairment charges — — 2 Total restructuring charges $ 14 $ (2) $ 51 The restructuring charges incurred for the year ended December 31, 2020 and 2018 were primarily associated with various workforce reduction initiatives as the Company continued to simplify and restructure its organization. The restructuring activity incurred for the year ended December 31, 2019 primarily represents a release of the liability relating to restructuring charges recorded in prior periods, which were determined to no longer be required. Of the total restructuring charges incurred during the year ended December 31, 2020, $9 million and $5 million were recorded in cost of services and selling, general and administrative expenses, respectively. The $(2) million of restructuring charges recognized during the year ended December 31, 2019 were recorded in selling, general and administrative expenses. Of the total restructuring charges incurred during the year ended December 31, 2018, $22 million and $29 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 during 2020 and 2019, which is included in accrued expenses in Note 12: Employee Separation Costs Facility-Related Costs Total Balance, December 31, 2018 $ 37 $ 1 $ 38 Income statement income (3) — (3) Cash payments (25) — (25) Other — (1) (1) Balance, December 31, 2019 9 — 9 Income statement expense 14 — 14 Cash payments (16) — (16) Balance, December 31, 2020 $ 7 $ — $ 7 |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS | BUSINESS ACQUISITIONS 2020 Acquisitions During 2020, the Company completed acquisitions for an aggregate purchase price of $330 million, net of cash acquired, including the acquisitions discussed below. The 2020 acquisitions resulted in goodwill of $247 million, of which $210 million is deductible for tax purposes. These acquisitions also resulted in $146 million of intangible assets, principally comprised of customer-related and technology intangible assets. Net revenues attributable to the 2020 acquisitions were $127 million for the year ended December 31, 2020. Acquisition of Blueprint Genetics Oy On January 21, 2020, the Company completed its acquisition of Blueprint Genetics Oy ("Blueprint Genetics"), in an all cash transaction for $108 million, net of $3 million cash acquired. Blueprint Genetics is a leading specialty genetic testing company with expertise in gene variant interpretation based on next generation sequencing and proprietary bioinformatics. Through the acquisition, the Company acquired all of Blueprint Genetics' operations. In the fourth quarter of 2020, the Company made an election to treat the acquisition as a taxable business combination for income tax purposes, which resulted in an adjustment to the preliminary purchase price allocation to reverse the previously recorded $11 million deferred tax liability, with a corresponding decrease to goodwill. Based on the final purchase price allocation, the assets acquired and liabilities assumed primarily consist of $66 million of tax-deductible goodwill, $43 million of intangible assets, and $2 million of property, plant and equipment and working capital. The intangible assets primarily consist of technology and customer-related assets which are being amortized over a useful life of 10 years and15 years, respectively. Acquisition of the Outreach Laboratory Services Business of Memorial Hermann Health System On April 6, 2020, the Company completed its acquisition of select assets which constitute substantially all of the operations of Memorial Hermann Diagnostic Laboratories, the outreach laboratory division of Memorial Hermann Health System ("Memorial Hermann"), in an all cash transaction for $120 million. Memorial Hermann is a not-for-profit health system in Southeast Texas. Based on the preliminary purchase price allocation, which may be revised as additional information becomes available during the measurement period, the assets acquired primarily consist of $27 million of customer-related intangible assets and $93 million of tax-deductible goodwill. The intangible assets are being amortized over a useful life of 15 years. Acquisition of the Remaining 56% Interest in Mid America Clinical Laboratories, LLC On August 1, 2020, the Company completed its acquisition of the remaining 56% interest in Mid America Clinical Laboratories, LLC ("MACL") from its joint venture partners in an all cash transaction for $93 million, net of $18 million cash acquired. MACL is the largest independent clinical laboratory provider in Indiana. Prior to the acquisition, the Company accounted for its 44% interest in MACL as an equity method investment, which was remeasured to its fair value of $87 million on the acquisition date, resulting in a gain of $70 million that was recognized in other income (expense), net in the consolidated statements of operations. The fair value of the previously held equity interest was determined using a discounted cash flow analysis that takes into account, among other items, MACL's expected future cash flows, long-term growth rate (1.5%), and a discount rate commensurate with economic risk (7.5%). Based on the preliminary purchase price allocation, which may be revised as additional information becomes available during the measurement period, the assets acquired and liabilities assumed consist of $84 million of goodwill (of which $47 million is tax-deductible), $74 million of intangible assets, $11 million of working capital and $11 million of property, plant and equipment. The intangible assets consist of customer-related assets which are being amortized over a useful life of 15 years. As a result of the acquisition, MACL became a wholly owned subsidiary of the Company. 2019 Acquisitions During 2019, the Company completed acquisitions for an aggregate purchase price of $63 million, including the acquisition discussed below. The 2019 acquisitions resulted in goodwill of $43 million, of which $36 million is deductible for tax purposes. These acquisitions also resulted in $21 million of intangible assets, principally comprised of customer-related intangibles. Acquisition of the Clinical Laboratory Services Business of Boyce & Bynum Pathology Laboratories, P.C. On February 11, 2019, the Company completed its acquisition of certain assets of the clinical laboratory services business of Boyce & Bynum Pathology Laboratories, P.C. ("Boyce & Bynum") in an all cash transaction for $61 million, which consisted of cash consideration of $55 million and contingent consideration initially estimated at $6 million. The contingent consideration arrangement was dependent upon the achievement of certain testing volume benchmarks. During 2019, the liability was reduced to $0 as a result of updated testing volume forecasts for the earn-out period compared to the testing volume target included in the contingent consideration arrangement, resulting in a $6 million gain recorded in other operating expense (income), net. Based on the purchase price allocation, the assets acquired principally consist of $41 million of goodwill (of which $35 million is tax deductible) and $20 million of customer-related intangible assets. The intangible assets are being amortized over a useful life of 15 years. 2018 Acquisitions During 2018, the Company completed acquisitions for an aggregate purchase price of $440 million, net of cash acquired, including the acquisitions discussed below. The 2018 acquisitions resulted in goodwill of $241 million, of which $205 million is deductible for tax purposes. These acquisitions also resulted in $167 million of intangible assets, principally comprised of customer-related intangibles. Net revenues attributable to the 2018 acquisitions were $84 million for the year ended December 31, 2018. Acquisition of Mobile Medical Examination Services, LLC. On February 1, 2018, the Company completed its acquisition of Mobile Medical Examination Services, LLC. ("MedXM"), a leading national provider of home-based health risk assessments and related services, in an all cash transaction for $142 million, net of $5 million cash acquired, which consisted of cash consideration of $130 million and contingent consideration initially estimated at $12 million. The contingent consideration arrangement was dependent upon the achievement of certain revenue targets. Subsequent to the acquisition, the estimated fair value of the contingent consideration was reduced to $0 as a result of updated revenue forecasts for 2018 compared to the earn-out revenue target included in the contingent consideration arrangement, resulting in a $12 million net gain recorded in other operating expense (income), net. Through the acquisition, the Company acquired all of MedXM's operations. The assets acquired and liabilities assumed consist of $77 million of intangible assets, $57 million of goodwill (of which $45 million is tax deductible), $7 million of working capital and $1 million of property, plant and equipment. The intangible assets consist primarily of customer-related assets which are being amortized over a useful life of 15 years. Acquisition of the Outreach Laboratory Services Business of Cape Cod Healthcare, Inc. On June 18, 2018, the Company completed the acquisition of the outreach laboratory services business of Cape Cod Healthcare, Inc., in an all cash transaction for $35 million. The assets acquired principally consist of tax deductible goodwill and customer-related intangible assets. Acquisition of ReproSource, Inc. On September 19, 2018, the Company completed the acquisition of ReproSource, Inc. ("ReproSource"), in an all cash transaction for $35 million, which consisted of cash consideration of $30 million and contingent consideration initially estimated at $5 million. The contingent consideration arrangement was dependent upon the achievement of certain revenue targets. During 2019, the liability was reduced to $0 as a result of updated revenue forecasts for 2019 compared to the earn-out revenue target included in the contingent consideration arrangement, resulting in a net gain recorded in other operating expense (income), net. ReproSource is a national leader in specialty fertility diagnostic services. Through the acquisition, the Company acquired all of ReproSource's operations. The assets acquired principally consist of goodwill, technology-related intangible assets and customer-related intangible assets. Acquisition of the U.S. Laboratory Services Business of Oxford Immunotec, Inc. On November 6, 2018, the Company completed the acquisition of all of the operations of the U.S. laboratory services business of Oxford Immunotec, Inc. ("Oxford"), in an all cash transaction for $170 million, net of $1 million cash acquired. The acquisition included laboratories in Tennessee and Massachusetts that provide tuberculosis and tick-borne disease testing services. As part of the transaction, Oxford will sell test kits and related accessories to the Company under a long-term supply agreement. In September 2019, the Company finalized its purchase price allocation and recorded a $13 million increase to goodwill, an $11 million decrease to intangible assets and a $2 million adjustment to other assets and liabilities. These adjustments did not have a material impact on the Company's consolidated results of operations. Based on the final purchase price allocation, the assets acquired and liabilities assumed primarily consist of $43 million of intangible assets, $112 million of tax deductible goodwill, $13 million of working capital and $6 million of property, plant and equipment. The intangible assets consist primarily of customer-related and contract-related assets which are being amortized over a useful life of 15 years and 5 years, respectively. General Information |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis 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, 2020 Assets: Trading securities $ 67 $ 67 $ — $ — Cash surrender value of life insurance policies 50 — 50 — Available-for-sale debt securities 12 — — 12 Total $ 129 $ 67 $ 50 $ 12 Liabilities: Deferred compensation liabilities $ 126 $ — $ 126 $ — Redeemable noncontrolling interest $ 82 $ — $ — $ 82 December 31, 2019 Assets: Trading securities $ 59 $ 59 $ — $ — Cash surrender value of life insurance policies 43 — 43 — Available-for-sale debt securities 12 — — 12 Total $ 114 $ 59 $ 43 $ 12 Liabilities: Deferred compensation liabilities $ 110 $ — $ 110 $ — Fixed-to-variable interest rate swaps 28 — 28 — Contingent consideration 7 — — 7 Total $ 145 $ — $ 138 $ 7 Redeemable noncontrolling interest $ 76 $ — $ — $ 76 The Company offers certain employees the opportunity to participate in a non-qualified supplemental deferred compensation plan. 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 of the fair value hierarchy 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 of the fair value hierarchy 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 obligation are classified within Level 2 of the fair value hierarchy because their inputs are derived principally from observable market data by correlation to the hypothetical investments. Deferrals under the plan currently may only be made by participants who made deferrals under the plan in 2017. The Company's available-for-sale debt securities are measured at fair value using discounted cash flows. These fair value measurements are classified within Level 3 of the fair value hierarchy as the fair value is based on significant inputs that are not observable. Significant inputs include cash flows projections and a discount rate. The fair value measurements of the Company's fixed-to-variable interest rate swaps, which were terminated during April 2020 (see Note 15), were classified within Level 2 of the fair value hierarchy, and were model-derived valuations as of a given date in which all significant inputs were observable in active markets including certain financial information and certain assumptions regarding past, present and future market conditions. In connection with previous business acquisitions, the Company had contingent consideration obligations that were to be paid based on the achievement of certain testing volume or revenue benchmarks. As of December 31, 2020, no contingent consideration obligations were outstanding. Contingent consideration liabilities are measured at fair value using an option-pricing method and are classified within Level 3 of the fair value hierarchy as the fair value is determined based on significant inputs that are not observable. Significant inputs include management’s estimate of volume or revenue and other market inputs including comparable company revenue volatility and a discount rate. 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, 2018 $ 14 Purchases, additions and issuances 6 Settlements (1) Total (gains)/losses included in earnings - realized/unrealized (12) Balance, December 31, 2019 7 Settlements (6) Total (gains)/losses included in earnings - realized/unrealized (1) Balance, December 31, 2020 $ — The $1 million and $12 million net gains included in earnings associated with the changes in the fair value of contingent consideration for the years ended December 31, 2020 and 2019, respectively, are reported in other operating expense (income), net. In connection with the sale of an 18.9% noncontrolling interest in a subsidiary to UMass Memorial Medical Center ("UMass") on July 1, 2015, the Company granted UMass the right to require the Company to purchase all of its interest in the subsidiary at fair value commencing July 1, 2020. As of December 31, 2020, the redeemable noncontrolling interest was presented at its fair value. The fair value measurement of the redeemable noncontrolling interest is classified within Level 3 of the fair value hierarchy because the fair value is based on a discounted cash flow analysis that takes into account, among other items, the joint venture's expected future cash flows, long-term growth rates, and a discount rate commensurate with economic risk. The carrying amounts of cash and cash equivalents, accounts receivable and accounts payable and accrued expenses approximate fair value based on the short maturities of these instruments. As of December 31, 2020 and 2019, the fair value of the Company’s debt was estimated at $4.6 billion and $5.1 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, 2020 | |
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 $1.9 billion, $1.1 billion and $0.9 billion from U.S. operations and pre-tax (loss) income of $(7) million, $15 million and $(1) million from foreign operations for the years ended December 31, 2020, 2019 and 2018, respectively. As a result of the Tax Cuts and Jobs Act, the Company changed its assertion that it intends to indefinitely reinvest undistributed earnings from certain non-U.S. subsidiaries outside the U.S. The Company is indefinitely reinvested in the remaining basis difference and it is not practicable to determine the associated amount of unrecognized deferred tax liability. The components of income tax expense (benefit) for 2020, 2019 and 2018 were as follows: 2020 2019 2018 Current: Federal $ 300 $ 176 $ 82 State and local 74 53 26 Foreign 1 3 1 Deferred: Federal 55 21 66 State and local 29 (4) 10 Foreign 1 (2) (3) Total $ 460 $ 247 $ 182 A reconciliation of the federal statutory income tax rate to the Company's effective income tax rate for 2020, 2019 and 2018 was as follows: 2020 2019 2018 Tax provision at statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal benefit 4.5 4.6 4.7 Impact of noncontrolling interests (0.9) (1.1) (1.4) Excess tax benefits on stock-based compensation arrangements (1.2) (1.2) (1.9) Return to provision true-ups (0.7) (1.4) (1.4) Change in accounting method — — (1.6) Impact of equity earnings 0.8 1.1 1.0 Changes in reserves for uncertain tax positions 0.9 1.7 (0.8) Change in valuation allowances associated with certain net operating losses 0.2 (1.1) — Other, net (0.1) (0.6) 0.1 Effective tax rate 24.5 % 23.0 % 19.7 % For the year ended December 31, 2019, the Company recognized a $12 million net income tax benefit due to the release of valuation allowances associated with certain net operating loss carryforwards. In 2018, the Company filed for a tax return accounting method change, effective for the tax year ending December 31, 2017, to accelerate the deduction of certain expenses on its 2017 tax return at the higher 2017 federal corporate statutory income tax rate, resulting in a $15 million income tax benefit. The net income tax benefit associated with changes in reserves for uncertain tax positions in 2018 was primarily related to the expiration of the statute of limitations for certain income tax returns. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets (liabilities) as of December 31, 2020 and 2019 were as follows: 2020 2019 Non-current deferred tax assets (liabilities): Accounts receivable reserves $ 71 $ 64 Liabilities not currently deductible 146 126 Stock-based compensation 47 35 Basis differences in investments, joint ventures and subsidiaries (81) (80) Net operating loss carryforwards, net of valuation allowance 61 75 Operating lease right-of-use assets (151) (129) Operating lease liabilities 161 139 Depreciation and amortization (604) (494) Total non-current deferred tax liabilities, net $ (350) $ (264) The non-current deferred tax assets (liabilities) disclosure at December 31, 2019 has been adjusted to separately state the gross deferred tax right-of-use asset and related gross deferred tax lease liability recognized in accordance with the new accounting standard for leases adopted on January 1, 2019. As of December 31, 2020 and 2019, non-current deferred tax liabilities of $350 million and $264 million, respectively, are included in other liabilities in the consolidated balance sheet. As of December 31, 2020, the Company had estimated net operating loss carryforwards for federal and state income tax purposes of $60 million and $1.0 billion, respectively, which expire at various dates through 2040. Estimated net operating loss carryforwards for foreign income tax purposes are $76 million as of December 31, 2020, some of which can be carried forward indefinitely while others expire at various dates through 2040. As of December 31, 2020 and 2019, deferred tax assets associated with net operating loss carryforwards of $94 million and $101 million, respectively, have each been reduced by valuation allowances of $33 million and $26 million, respectively. Income taxes payable, including those classified as long-term in other liabilities in the consolidated balance sheet as of December 31, 2020 and 2019, were $135 million and $113 million, respectively. Prepaid income taxes were $2 million and $3 million as of December 31, 2020 and 2019, respectively, and were recorded in prepaid expenses and other current assets in the consolidated balance sheet. The total amount of unrecognized tax benefits as of and for the years ended December 31, 2020, 2019 and 2018 consisted of the following: 2020 2019 2018 Balance, beginning of year $ 88 $ 107 $ 115 Additions: For tax positions of current year 2 2 2 For tax positions of prior years 25 16 11 Reductions: Changes in judgment (9) (3) (6) Expirations of statutes of limitations (4) (2) (15) Settlements (9) (32) — Balance, end of year $ 93 $ 88 $ 107 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, certain tax credits and the deductibility of certain expenses and settlement payments. The total amount of unrecognized tax benefits as of December 31, 2020, that, if recognized, would affect the effective income tax rate is $75 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 $15 million within the next twelve months. Accruals for interest expense on contingent tax liabilities are classified in income tax expense in the consolidated statements of operations. Accruals for penalties have historically been immaterial. Interest expense included in income tax expense in each of the years ended December 31, 2020, 2019 and 2018 was approximately $6 million, $5 million and $1 million, respectively. As of December 31, 2020 and 2019, the Company had approximately $21 million and $17 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 certain 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 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 2016 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, 2020, a summary of the tax years that remain subject to examination, awaiting approval, are under appeal, or are otherwise unresolved for the Company's major jurisdictions are: United States - federal 2017 - 2020 |
SUPPLEMENTAL CASH FLOW AND OTHE
SUPPLEMENTAL CASH FLOW AND OTHER DATA | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW AND OTHER DATA | SUPPLEMENTAL CASH FLOW AND OTHER DATA Supplemental cash flow and other data for the years ended December 31, 2020, 2019 and 2018 was as follows: 2020 2019 2018 Depreciation expense $ 258 $ 233 $ 219 Amortization expense 103 96 90 Depreciation and amortization expense $ 361 $ 329 $ 309 Interest expense $ (166) $ (180) $ (169) Interest income 3 5 2 Interest expense, net $ (163) $ (175) $ (167) Interest paid $ 201 $ 192 $ 174 Income taxes paid $ 360 $ 202 $ 84 Accounts payable associated with capital expenditures $ 46 $ 26 $ 11 Accounts payable associated with purchases of treasury stock $ — $ — $ 3 Dividend payable $ 76 $ 71 $ 71 Businesses acquired: Fair value of assets acquired $ 368 $ 63 $ 453 Fair value of liabilities assumed 17 — 7 Fair value of net assets acquired 351 63 446 Merger consideration payable — (5) (19) Cash paid for business acquisitions 351 58 427 Less: Cash acquired 21 — 6 Business acquisitions, net of cash acquired $ 330 $ 58 $ 421 2020 2019 2018 Leases: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 185 $ 180 Operating cash flows from finance leases $ 3 $ 3 Financing cash flows from finance leases $ 3 $ 4 Leased assets obtained in exchange for new operating lease liabilities $ 219 $ 164 Leased assets obtained in exchange for new finance lease liabilities (a) $ — $ 1 $ 1 (a) For the year ended December 31, 2018, leased assets obtained in exchange for new finance lease liabilities reflects information prior to the adoption of the new accounting standard for leases on January 1, 2019. See Note 14 for further discussion of the Company's accounting for leases. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of December 31, 2020 and 2019 consisted of the following: 2020 2019 Land $ 42 $ 25 Buildings and improvements 526 341 Laboratory equipment and furniture and fixtures 1,974 1,788 Leasehold improvements 666 639 Computer software developed or obtained for internal use 1,209 1,106 Construction-in-progress 202 330 4,619 4,229 Less: Accumulated depreciation and amortization (2,992) (2,776) Total $ 1,627 $ 1,453 For the year ended December 31, 2019, the Company recognized a $73 million gain in other operating expense (income), net on the sale and leaseback of a property. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The changes in goodwill for the years ended December 31, 2020 and 2019 were as follows: 2020 2019 Balance, beginning of year $ 6,619 $ 6,563 Goodwill acquired during the year 247 43 Adjustments to goodwill 7 13 Balance, end of year $ 6,873 $ 6,619 Principally all of the Company’s goodwill as of December 31, 2020 and 2019 was associated with its DIS business. For the year ended December 31, 2020, goodwill acquired during the period was principally associated with the acquisitions of Blueprint Genetics, Memorial Hermann and MACL (see Note 6). For the year ended December 31, 2020, adjustments to goodwill related to foreign currency translation. For the year ended December 31, 2019, goodwill acquired during the period was principally associated with the acquisition of certain assets of the clinical laboratory services business of Boyce & Bynum and adjustments to goodwill primarily related to the finalization of the purchase price allocation for Oxford (see Note 6). Intangible assets as of December 31, 2020 and 2019 consisted of the following: Weighted 2020 2019 Cost Accumulated Net Cost Accumulated Net Amortizing intangible assets: Customer-related 17 $ 1,479 $ (638) $ 841 $ 1,367 $ (556) $ 811 Non-compete agreements 9 3 (2) 1 3 (2) 1 Technology 15 141 (65) 76 104 (56) 48 Other 9 108 (95) 13 110 (85) 25 Total 17 1,731 (800) 931 1,584 (699) 885 Intangible assets not subject to amortization: Trade names 235 — 235 235 — 235 Other 1 — 1 1 — 1 Total intangible assets $ 1,967 $ (800) $ 1,167 $ 1,820 $ (699) $ 1,121 The estimated amortization expense related to amortizable intangible assets for each of the five succeeding fiscal years and thereafter as of December 31, 2020 is as follows: Year Ending December 31, 2021 $ 101 2022 98 2023 96 2024 93 2025 92 Thereafter 451 Total $ 931 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 and 2019 consisted of the following: 2020 2019 Accrued wages and benefits (including incentive compensation) $ 502 $ 287 Trade accounts payable 446 263 Accrued expenses 356 223 Overdrafts 153 88 Dividend payable 76 71 Income taxes payable 43 27 Accrued insurance 31 30 Accrued interest 26 45 Merger consideration payable — 7 Total $ 1,633 $ 1,041 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2020 | |
Debt Instruments [Abstract] | |
DEBT | DEBT Long-term debt (including finance lease obligations) as of December 31, 2020 and 2019 consisted of the following: 2020 2019 4.75% Senior Notes due January 2020 $ — $ 500 2.50% Senior Notes due March 2020 — 300 4.70% Senior Notes due April 2021 — 554 4.25% Senior Notes due April 2024 316 308 3.50% Senior Notes due March 2025 622 593 3.45% Senior Notes due June 2026 512 490 4.20% Senior Notes due June 2029 499 499 2.95% Senior Notes due June 2030 798 798 2.80% Senior Notes due June 2031 549 — 6.95% Senior Notes due July 2037 175 175 5.75% Senior Notes due January 2040 245 245 4.70% Senior Notes due March 2045 300 300 Other 27 34 Debt issuance costs (28) (26) Total long-term debt 4,015 4,770 Less: Current portion of long-term debt 2 804 Total long-term debt, net of current portion $ 4,013 $ 3,966 Secured Receivables Credit Facility On October 22, 2020, the Company amended the agreement for its $600 million secured receivables credit facility (the “Secured Receivables Credit Facility”), previously amended in October 2019, to extend the maturity dates for each underlying commitment by one year, while maintaining the borrowing capacity under the facility at $600 million. Under the Secured Receivables Credit Facility, the Company can borrow against a $250 million loan commitment maturing October 2021 and a $250 million loan commitment maturing October 2022, and can issue up to $100 million of letters of credit (see Note 18) through October 2022. Borrowings under the Secured Receivables Credit Facility are collateralized by certain domestic receivables. As of December 31, 2020, interest on the borrowings under the Secured Receivables Credit Facility was based on either commercial paper rates for highly-rated issuers or LIBOR, plus a spread of 0.825% to 0.95%. The Secured Receivables Credit Facility is subject to customary affirmative and negative covenants and certain financial covenants with respect to the receivables that comprise the borrowing base and secure the borrowings under the facility. As of both December 31, 2020 and 2019, there were no outstanding borrowings under the Secured Receivables Credit Facility. Senior Unsecured Revolving Credit Facility The Company is party to a $750 million senior unsecured revolving credit facility (the “Credit Facility” or "Senior Unsecured Revolving Credit Facility") which matures in March 2023. Under the Credit Facility, the Company can issue letters of credit totaling $150 million (see Note 18). Issued letters of credit reduce the available borrowing capacity under the Credit Facility. Interest on the Credit Facility is based on certain published rates plus an applicable margin based on changes in the Company's public debt ratings and its leverage ratio. 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, 2020 and 2019, 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 a financial leverage ratio, which could impact the Company's ability to, among other things, incur additional indebtedness. In April 2020, the Company amended the Credit Facility to provide increased covenant flexibility. As amended, the leverage ratio covenant (as defined in the Credit Facility) was increased as follows: As of: Applicable Covenant: December 31, 2020 no more than 6.5 times EBITDA March 31, 2021 no more than 6.25 times EBITDA June 30, 2021 no more than 4.5 times EBITDA Thereafter, the leverage ratio covenant reverts to no more than 3.5 times EBITDA. During the period that the increased covenant applies, which period may be terminated early by the Company provided that the Company is in compliance with the historical 3.5 times EBITDA leverage ratio, the amended Credit Facility contains certain additional limitations and restrictions including, but not limited to, repurchases of the Company's common stock, the amount of funds that can be used on business acquisitions, the incurrence of secured indebtedness and the payment of dividends. As of both December 31, 2020 and 2019, there were no outstanding borrowings under the Senior Unsecured Revolving Credit Facility. As of December 31, 2020, the Company was in compliance with all covenants for its credit facilities. As of December 31, 2020, the Company had $1.3 billion of borrowing capacity available under the facilities, including $530 million available under the Secured Receivables Credit Facility and $750 million available under the Senior Unsecured Revolving Credit Facility. Senior Notes Offerings In May 2020, the Company completed a senior notes offering, consisting of $550 million aggregate principal amount of 2.80% senior notes due June 2031 (the “2031 Senior Notes”), which were issued at an original issue discount of $1 million. The Company incurred $5 million of debt issuance costs associated with the 2031 Senior Notes, which are included as a reduction to the carrying amount of long-term debt and which are being amortized over the term of the related debt. During November 2020, the net proceeds from the 2031 Senior Notes, along with cash on hand, were used to redeem in full the outstanding indebtedness under the Company's senior notes due April 2021. In December 2019, the Company completed a senior notes offering, consisting of $800 million aggregate principal amount of 2.95% senior notes due June 2030 (the "2030 Senior Notes"), which were issued at an original issue discount of $2 million. The Company incurred $7 million of debt issuance costs associated with the 2030 Senior Notes, which are included as a reduction to the carrying amount of long-term debt and which are being amortized over the term of the related debt. During January 2020, the net proceeds from the 2030 Senior Notes, along with cash on hand, were used to redeem in full the outstanding indebtedness under the Company's senior notes due January 2020 and senior notes due March 2020. In March 2019, the Company completed a senior notes offering, consisting of $500 million aggregate principal amount of 4.20% senior notes due June 2029 (the "2029 Senior Notes"), which were issued at an original issue discount of $1 million. The Company incurred $5 million of debt issuance costs associated with the 2029 Senior Notes, which are included as a reduction to the carrying amount of long-term debt and which are being amortized over the term of the related debt. The net proceeds from the 2029 Senior Notes were used to repay in full the outstanding indebtedness under the Company's senior notes due April 2019, to repay outstanding indebtedness under the Secured Receivables Credit Facility and for general corporate purposes. For the year ended December 31, 2020, the Company recorded a loss on retirement of debt, principally comprised of premiums paid, of $9 million in other income (expense), net. 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. The Company may redeem its outstanding senior notes prior to scheduled maturity, as a whole or in part, at a redemption price equal to the present value of the remaining scheduled payments of principal and interest, except for certain notes for which the Company also has an option to redeem such instruments at par value on or after dates specified in the indentures governing the notes ("the par value redemption option"). For notes with the par value redemption option, if such notes are redeemed prior to the specified dates, the redemption price calculations exclude any interest that would have been due after such dates. Maturities of Long-Term Debt As of December 31, 2020, long-term debt matures as follows: Year Ending December 31, 2021 $ 2 2022 1 2023 1 2024 302 2025 602 Thereafter 3,095 Total maturities of long-term debt 4,003 Unamortized discount (11) Debt issuance costs (28) Fair value basis adjustments attributable to hedged debt 51 Total long-term debt 4,015 Less: Current portion of long-term debt 2 Total long-term debt, net of current portion $ 4,013 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
LEASES | LEASES The Company determines if an arrangement is or contains a lease at contract inception. The Company leases office space, patient service centers, clinical laboratories, warehouses, logistic hubs and equipment primarily through operating leases, with a limited number of finance leases. A right-of-use asset, representing the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For the year ended December 31, 2020 and 2019, lease expense associated with short-term leases was not material. The Company primarily uses its collateralized incremental borrowing rate in determining the present value of lease payments as the Company's leases generally do not provide an implicit rate. Such incremental borrowing rates, which take into account interest rates offered to companies that have similar credit ratings to the Company, are determined using a portfolio approach which groups the Company’s leases based on tenor. The Company has lease agreements with (i) right-of-use asset payments and (ii) non-lease components (i.e., payments related to maintenance fees, utilities, etc.) which have been combined and accounted for as a single lease component. The Company's leases have remaining terms of less than 1 year to 16 years, some of which include options to extend the leases for up to 15 years. The Company's lease terms may include renewal options that are reasonably certain to be exercised and termination options that are reasonably certain not to be exercised. Certain leases also include options to purchase the leased property. Certain of the Company's lease agreements include rental payments adjusted periodically for inflation or a market rate which are included in the lease liabilities. The Company's assets and liabilities for its lease agreements as of December 31, 2020 and 2019 were as follows: Leases Balance Sheet Classification 2020 2019 Assets Operating Operating lease right-of-use assets $ 604 $ 518 Finance Property, plant and equipment, net (a) 22 35 Total lease assets $ 626 $ 553 Liabilities Current: Operating Current portion of long-term operating lease liabilities $ 141 $ 145 Finance Current portion of long-term debt 2 3 Non-current: Operating Long-term operating lease liabilities 499 413 Finance Long-term debt 25 30 Total lease liabilities $ 667 $ 591 (a) Finance lease assets as of December 31, 2020 and 2019 were recorded net of accumulated amortization of $14 million and $24 million, respectively. Components of lease cost for the years ended December 31, 2020 and 2019 were as follows: Lease cost 2020 2019 Operating lease cost (a) $ 300 $ 294 Finance lease cost: Amortization of leased assets 6 7 Interest on lease liabilities 3 3 Net lease cost $ 309 $ 304 (a) Includes short-term leases and variable lease costs (primarily usage-based maintenance fees and utilities related to real estate leases and certain equipment-related and vehicle-related costs) of $120 million for each of the years ended December 31, 2020 and 2019. Rental expense for real estate, laboratory equipment and vehicles under operating leases amounted to $220 million for the year ended December 31, 2018. The maturity of the Company's lease liabilities as of December 31, 2020 is as follows: Maturity of lease liabilities Operating leases Finance leases Total 2021 $ 160 $ 4 $ 164 2022 140 3 143 2023 122 3 125 2024 87 3 90 2025 57 3 60 Thereafter 153 28 181 Total lease payments 719 44 763 Less: Interest 79 17 96 Present value of lease liabilities $ 640 $ 27 $ 667 Lease term and discount rate as of December 31, 2020 and 2019 were as follows: Lease term and discount rate 2020 2019 Weighted-average remaining lease term (years): Operating leases 6 5 Finance leases 13 12 Weighted-average discount rate: Operating leases 3.2 % 3.4 % Finance leases 8.1 % 8.7 % The Company's discount rates for its operating leases were primarily determined using the Company's incremental borrowing rate. The Company's weighted-average discount rate for its finance leases principally reflects the implicit interest rate on a lease obligation assumed in a business combination. See Note 9 for cash flow information on cash paid for amounts included in the measurement of lease liabilities, leased assets obtained in exchange for new operating lease liabilities, and leased assets obtained in exchange for new finance lease liabilities for the years ended December 31, 2020 and 2019. |
LEASES | LEASES The Company determines if an arrangement is or contains a lease at contract inception. The Company leases office space, patient service centers, clinical laboratories, warehouses, logistic hubs and equipment primarily through operating leases, with a limited number of finance leases. A right-of-use asset, representing the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For the year ended December 31, 2020 and 2019, lease expense associated with short-term leases was not material. The Company primarily uses its collateralized incremental borrowing rate in determining the present value of lease payments as the Company's leases generally do not provide an implicit rate. Such incremental borrowing rates, which take into account interest rates offered to companies that have similar credit ratings to the Company, are determined using a portfolio approach which groups the Company’s leases based on tenor. The Company has lease agreements with (i) right-of-use asset payments and (ii) non-lease components (i.e., payments related to maintenance fees, utilities, etc.) which have been combined and accounted for as a single lease component. The Company's leases have remaining terms of less than 1 year to 16 years, some of which include options to extend the leases for up to 15 years. The Company's lease terms may include renewal options that are reasonably certain to be exercised and termination options that are reasonably certain not to be exercised. Certain leases also include options to purchase the leased property. Certain of the Company's lease agreements include rental payments adjusted periodically for inflation or a market rate which are included in the lease liabilities. The Company's assets and liabilities for its lease agreements as of December 31, 2020 and 2019 were as follows: Leases Balance Sheet Classification 2020 2019 Assets Operating Operating lease right-of-use assets $ 604 $ 518 Finance Property, plant and equipment, net (a) 22 35 Total lease assets $ 626 $ 553 Liabilities Current: Operating Current portion of long-term operating lease liabilities $ 141 $ 145 Finance Current portion of long-term debt 2 3 Non-current: Operating Long-term operating lease liabilities 499 413 Finance Long-term debt 25 30 Total lease liabilities $ 667 $ 591 (a) Finance lease assets as of December 31, 2020 and 2019 were recorded net of accumulated amortization of $14 million and $24 million, respectively. Components of lease cost for the years ended December 31, 2020 and 2019 were as follows: Lease cost 2020 2019 Operating lease cost (a) $ 300 $ 294 Finance lease cost: Amortization of leased assets 6 7 Interest on lease liabilities 3 3 Net lease cost $ 309 $ 304 (a) Includes short-term leases and variable lease costs (primarily usage-based maintenance fees and utilities related to real estate leases and certain equipment-related and vehicle-related costs) of $120 million for each of the years ended December 31, 2020 and 2019. Rental expense for real estate, laboratory equipment and vehicles under operating leases amounted to $220 million for the year ended December 31, 2018. The maturity of the Company's lease liabilities as of December 31, 2020 is as follows: Maturity of lease liabilities Operating leases Finance leases Total 2021 $ 160 $ 4 $ 164 2022 140 3 143 2023 122 3 125 2024 87 3 90 2025 57 3 60 Thereafter 153 28 181 Total lease payments 719 44 763 Less: Interest 79 17 96 Present value of lease liabilities $ 640 $ 27 $ 667 Lease term and discount rate as of December 31, 2020 and 2019 were as follows: Lease term and discount rate 2020 2019 Weighted-average remaining lease term (years): Operating leases 6 5 Finance leases 13 12 Weighted-average discount rate: Operating leases 3.2 % 3.4 % Finance leases 8.1 % 8.7 % The Company's discount rates for its operating leases were primarily determined using the Company's incremental borrowing rate. The Company's weighted-average discount rate for its finance leases principally reflects the implicit interest rate on a lease obligation assumed in a business combination. See Note 9 for cash flow information on cash paid for amounts included in the measurement of lease liabilities, leased assets obtained in exchange for new operating lease liabilities, and leased assets obtained in exchange for new finance lease liabilities for the years ended December 31, 2020 and 2019. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2020 | |
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. During March 2020, the Company entered into a forward-starting interest rate swap agreement with a financial institution for a total notional amount of $25 million. Additionally, during May 2020, the Company entered into interest rate lock agreements with several financial institutions for a total notional amount of $275 million. The forward-starting interest rate swap agreement and the interest rate lock agreements were entered into in order to hedge a portion of the Company's interest rate exposure associated with variability in future cash flows attributable to changes in interest rates over a ten ten The total net loss, net of taxes, recognized in accumulated other comprehensive loss, related to the Company's cash flow hedges was $1 million and $4 million as of December 31, 2020 and 2019, respectively. The net amount of deferred losses on cash flow hedges that is expected to be reclassified from accumulated other comprehensive loss into interest expense, net within the next twelve months is $1 million. Interest Rate Derivatives – Fair Value Hedges As of December 31, 2019, the Company had various fixed-to-variable interest rate swap agreements outstanding with an aggregate notional amount of $1.2 billion, which were entered into in order to convert a portion of the Company's long-term debt into variable interest rate debt. In April 2020, the Company terminated these existing fixed-to-variable interest rate swap agreements and received proceeds of $40 million. Such amount was reflected as a basis adjustment to the hedged debt instruments and is being amortized as a reduction of interest expense, net over their remaining terms. As of December 31, 2020 and 2019, the following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges included in the carrying amount of long-term debt: Carrying Amount of Hedged Long-Term Debt Hedge Accounting Basis Adjustment (a) Carrying Amount of Hedged Long-Term Debt Hedge Accounting Basis Adjustment (a) Balance Sheet Classification December 31, 2020 December 31, 2020 December 31, 2019 December 31, 2019 Long-term debt $ — $ 51 $ 1,186 $ (3) (a) As of December 31, 2020, the entire balance is associated with remaining unamortized hedging adjustments on discounted relationships. As of December 31, 2019, the balance includes $25 million of remaining unamortized hedging adjustments on discontinued relationships. The following table presents the effect of fair value hedge accounting on the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018, respectively: 2020 2019 2018 Other income (expense), net Other income (expense), net Other income (expense), net Total for line item in which the effects of fair value hedges are recorded $ 76 $ 20 $ (8) Gain (loss) on fair value hedging relationships: Hedged items (Long-term debt) $ (68) $ (65) $ 4 Derivatives designated as hedging instruments $ 68 $ 65 $ (4) A summary of the fair values of derivative instruments in the consolidated balance sheet was as follows: December 31, 2019 Balance Sheet Fair Value Derivatives Designated as Hedging Instruments Fixed-to-variable interest rate swap agreements Other liabilities $ 28 |
STOCKHOLDERS_ EQUITY AND REDEEM
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST | 12 Months Ended |
Dec. 31, 2020 | |
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 Under the Company's Restated Certificate of Incorporation the number of authorized shares of common stock, par value $0.01 per share, is 600 million shares. Changes in Accumulated Other Comprehensive Loss by Component Comprehensive income (loss) includes: • Foreign currency translation adjustments; • Net changes in available-for-sale debt securities, which represent unrealized holding gains (losses), net of tax, on available-for-sale debt securities; and • Net deferred gains (losses) on cash flow hedges, which represent deferred gains (losses), net of tax, on interest rate-related derivative financial instruments designated as cash flow hedges, net of amounts reclassified to interest expense (see Note 15). For the years ended December 31, 2020, 2019, and 2018, the tax effects related to the deferred gains (losses) on cash flow hedges and net changes in available-for-sale debt securities were not material. Foreign currency translation adjustments related to indefinite investments in non-U.S. subsidiaries are not adjusted for income taxes. The changes in accumulated other comprehensive loss by component for 2020, 2019 and 2018 were as follows: Foreign Net Changes in Available-for-Sale Debt Securities Net Deferred Losses on Cash Flow Hedges, net of tax Other Accumulated Other Comprehensive Loss Balance, December 31, 2017 $ (38) $ — $ (9) $ (1) $ (48) Other comprehensive loss before reclassifications (15) — — — (15) Amounts reclassified from accumulated other comprehensive loss 4 — 2 — 6 Net current period other comprehensive (loss) income (11) — 2 — (9) Reclassification of stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act — — (2) — (2) Balance, December 31, 2018 (49) — (9) (1) (59) Other comprehensive income before reclassifications 7 8 3 — 18 Amounts reclassified from accumulated other comprehensive loss — — 2 — 2 Net current period other comprehensive income 7 8 5 — 20 Balance, December 31, 2019 (42) 8 (4) (1) (39) Other comprehensive income before reclassifications 12 — 1 — 13 Amounts reclassified from accumulated other comprehensive loss 3 — 2 — 5 Net current period other comprehensive income 15 — 3 — 18 Balance, December 31, 2020 $ (27) $ 8 $ (1) $ (1) $ (21) For the years ended December 31, 2020, 2019 and 2018, the gross deferred losses on cash flow hedges were reclassified from accumulated other comprehensive loss to interest expense, net. For the years ended December 31, 2020 and 2018, foreign currency translation adjustment amounts were reclassified from accumulated other comprehensive loss to other operating expense (income), net as a result of the sale of foreign subsidiaries. Dividend Program During each of the four quarters of 2020, the Company's Board of Directors declared a quarterly cash dividend of $0.56 per common share. During each of the four quarters of 2019, the Company's Board of Directors declared a quarterly cash dividend of $0.53 per common share. During each of the first three quarters of 2018, the Company's Board of Directors declared a quarterly cash dividend of $0.50 per common share. During the fourth quarter of 2018, the Company's Board of Directors declared a quarterly cash dividend of $0.53 per common share. On February 4, 2021, the Company announced that its Board of Directors authorized a 10.7% increase in its quarterly cash dividend from $0.56 to $0.62 per share, or $2.48 per share annually, commencing with the dividend payable in April 2021. Share Repurchase Program As of December 31, 2020, $0.9 billion remained available under the Company’s share repurchase authorization. In February 2021, the Company's Board of Directors authorized the Company to repurchase an additional $1 billion of the Company's common stock. The share repurchase authorization has no set expiration or termination date. Share Repurchases For the year ended December 31, 2020, the Company repurchased 2.7 million shares of its common stock for $325 million. For the year ended December 31, 2019, the Company repurchased 3.5 million shares of its common stock for $350 million. For the year ended December 31, 2018, the Company repurchased 3.4 million shares of its common stock for $325 million, which included an accrual of $3 million recorded in accounts payable and accrued expenses in the consolidated balance sheet for share repurchases not settled until after December 31, 2018. Shares Reissued from Treasury Stock For the years ended December 31, 2020, 2019 and 2018 the Company reissued 3 million shares, 2 million shares and 3 million shares, respectively, from treasury stock for shares issued under the Employee Stock Purchase Plan ("ESPP") and stock option plans. Redeemable Noncontrolling Interest |
STOCK OWNERSHIP AND COMPENSATIO
STOCK OWNERSHIP AND COMPENSATION PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OWNERSHIP AND COMPENSATION PLANS | STOCK OWNERSHIP AND COMPENSATION PLANS Employee and Non-employee Directors Stock Ownership Programs 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. Under the ELTIP, awards 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 units, the actual amount of shares earned is based on the achievement of the performance goals specified in the awards. The performance goals for awards granted for 2018 and 2019 were based on the financial performance of the Company. The performance goals for awards granted in 2020 were based on the financial performance of the Company as well as relative TSR. The maximum number of shares of Company common stock in respect of which awards may be granted under the ELTIP is approximately 79 million shares. 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. For all award types, the vesting period is generally over three years from the date of grant, regardless of whether the award recipient 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, 2020, 2019 and 2018, grants under the DLTIP totaled 14 thousand shares, 14 thousand shares and 15 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 16 for further information regarding the Company's share repurchase program. The fair value of each stock option award granted was estimated on the date of grant using a Black-Scholes option-valuation model. 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 stock option exercise behavior of employees. The weighted average assumptions used in valuing stock options granted in the periods presented were: 2020 2019 2018 Fair value at grant date $17.25 $14.30 $18.14 Expected volatility 20.3% 20.4% 19.1% Dividend yield 2.0% 2.4% 1.9% Risk-free interest rate 1.5% 2.5% 2.8% Expected holding period, in years 5.0 5.2 5.3 The following summarizes the activity relative to stock option awards for 2020: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Options outstanding, beginning of year 8.0 $ 81.67 Options granted 1.1 112.23 Options exercised (2.6) 72.57 Options outstanding, end of year 6.5 $ 90.32 6.7 $ 187 Exercisable, end of year 3.9 $ 83.72 5.6 $ 138 Vested and expected to vest, end of year 6.4 $ 90.14 6.7 $ 185 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 2020 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, 2020. This amount changes based on the fair market value of the Company's common stock. Total intrinsic value of options exercised in 2020, 2019 and 2018 was $113 million, $62 million and $67 million, respectively. As of December 31, 2020, there was $9 million of unrecognized stock-based compensation cost related to nonvested stock options which is expected to be recognized over a weighted average period of 1.6 years. The fair value of restricted stock awards and restricted stock units is the average market price of the Company's common stock at the date of grant. For performance share units with a goal based on the financial performance of the Company, the fair value is based on the average market price of the Company's common stock at the date of grant, adjusted for the present value of dividends expected to be paid on the Company's common stock during the vesting period. For performance share units with a market-based relative TSR goal, the fair value is estimated on the date of grant using a Monte Carlo valuation model. The expected volatility under the Monte Carlo valuation model is based on the historical volatility of the common stock of the Company and the common stock of the companies in the peer index. The dividend yield is 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 is based on the U.S. Treasury yield curve in effect at the time of grant for bonds with maturities consistent with the performance period of the related award. The weighted average assumptions used in valuing performance share units in 2020 with a market-based relative TSR goal were: Fair value at grant date $144.03 Expected volatility 20.1% Dividend yield 2.0% Risk-free interest rate 1.4% The following summarizes the activity relative to stock awards, including restricted stock units and performance share units, for 2020, 2019 and 2018: 2020 2019 2018 Shares Weighted Shares Weighted Shares Weighted Shares outstanding, beginning of year 1.0 $ 93.30 1.1 $ 88.13 1.3 $ 77.90 Shares granted 0.4 112.43 0.4 86.28 0.4 103.51 Shares vested (0.4) 96.36 (0.4) 75.58 (0.5) 74.00 Shares forfeited and canceled — — (0.1) 94.09 (0.1) 90.16 Shares outstanding, end of year 1.0 $ 100.12 1.0 $ 93.30 1.1 $ 88.13 As of December 31, 2020, there was $29 million of unrecognized stock-based compensation cost related to nonvested stock awards, which is expected to be recognized over a weighted average period of 1.5 years. Total fair value of shares vested was $37 million, $40 million and $54 million for the years ended December 31, 2020, 2019 and 2018, respectively. For performance share units with a goal based on financial performance of the Company, 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, 2020, 2019 and 2018, stock-based compensation expense totaled $97 million, $56 million and $61 million, respectively. Income tax benefits recognized in the consolidated statements of operations related to stock-based compensation expense totaled $39 million, $27 million and $33 million for the years ended December 31, 2020, 2019 and 2018, respectively, which includes excess tax benefits associated with stock-based compensation arrangements of $23 million, $13 million and $18 million for the years ended December 31, 2020, 2019 and 2018, respectively. Employee Stock Purchase Plan Under the Company's 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 95% 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 225 thousand shares, 269 thousand shares and 326 thousand shares of common stock were purchased by eligible employees in 2020, 2019 and 2018, 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. During 2020, the Company temporarily suspended matching contributions for certain qualified defined contribution plans; matching contributions were reinstated in the third quarter of 2020. The Company's expense for contributions to its defined contribution plans aggregated $64 million, $84 million and $78 million for 2020, 2019 and 2018, 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. During 2020, the Company temporarily suspended matching contributions; matching contributions were reinstated in the third quarter of 2020. 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 $67 million and $59 million as of December 31, 2020 and 2019, respectively. Although the Company is currently contributing all participant deferrals and matching amounts to a trust, the funds in this trust, totaling $67 million and $59 million as of December 31, 2020 and 2019, 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. 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 period of four years at 25% per year. This plan was amended effective January 1, 2018 so that future deferrals under the plan may only be made by participants who made deferrals under the plan in 2017. The amounts accrued under this plan were $59 million and $51 million as of December 31, 2020 and 2019, 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 $50 million and $43 million as of December 31, 2020 and 2019, respectively. For each of the years ended December 31, 2020, 2019 and 2018, the Company's expense for matching contributions to these plans was not material. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
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, $70 million in letters of credit under the Secured Receivables Credit Facility were outstanding as of December 31, 2020. The letters of credit primarily represent collateral for current and future automobile liability and workers’ compensation loss payments. 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, 2020, the approximate total future purchase commitments are $334 million, of which $106 million are expected to be incurred in 2021, $103 million are expected to be incurred in 2022 through 2023 and the balance thereafter. Billing and Collection Agreement In September 2016, the Company entered into a ten 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 27 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. Certain Legal Matters The Company may incur losses associated with these proceedings and investigations, but it is not possible to estimate the amount of loss or range of loss, if any, that might result from adverse judgments, settlements, fines, penalties, or other resolution of these proceedings and investigations based on the stage of these proceedings and investigations, the absence of specific allegations as to alleged damages, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and/or the lack of resolution of significant factual and legal issues. The Company has insurance coverage rights in place (limited in amount; subject to deductible) for certain potential costs and liabilities related to these proceedings and investigations. 401(k) Plan Lawsuit In 2020, two putative class action lawsuits were filed in the U.S. District Court for the District of New Jersey against the Company and other defendants with respect to the Company’s 401(k) plan. The complaint alleges, among other things, that the fiduciaries of the 401(k) plan breached their duties by failing to disclose the expenses and risks of plan investment options, allowing unreasonable administration expenses to be charged to plan participants, and selecting and retaining high cost and poor performing investments. In October 2020, the court consolidated the two lawsuits under the caption In re: Quest Diagnostics ERISA Litigation and plaintiffs filed a consolidated amended complaint. The Company plans to vigorously defend this matter and has filed a motion to dismiss the complaint. AMCA Data Security Incident On June 3, 2019, the Company reported that Retrieval-Masters Creditors Bureau, Inc./American Medical Collection Agency (“AMCA”) had informed the Company and Optum360 LLC that an unauthorized user had access to AMCA’s system between August 1, 2018 and March 30, 2019 (the “AMCA Data Security Incident”). Optum360 provides revenue management services to the Company, and AMCA provided debt collection services to Optum360. AMCA first informed the Company of the AMCA Data Security Incident on May 14, 2019. AMCA’s affected system included financial information (e.g., credit card numbers and bank account information), medical information and other personal information (e.g., social security numbers). Test results were not included. Neither Optum360’s nor the Company’s systems or databases were involved in the incident. AMCA also informed the Company that information pertaining to other laboratories’ customers was also affected. Following announcement of the AMCA Data Security Incident, AMCA sought protection under the U.S. bankruptcy laws. The bankruptcy proceeding has been dismissed. Numerous putative class action lawsuits were filed against the Company related to the AMCA Data Security Incident. The U.S. Judicial Panel on Multidistrict Litigation transferred the cases still pending to, and consolidated them for pre-trial proceedings in, the U.S. District Court for New Jersey. In November 2019, the plaintiffs in the multidistrict proceeding filed a consolidated putative class action complaint against the Company and Optum360 that named additional individuals as plaintiffs and that asserted a variety of common law and statutory claims in connection with the AMCA Data Security Incident. In January 2020, the Company moved to dismiss the consolidated complaint; the motion to dismiss is pending. In addition, certain federal and state governmental authorities are investigating, or otherwise seeking information and/or documents from the Company related to the AMCA Data Security Incident and related matters, including the Office for Civil Rights of the U.S. Department of Health and Human Services, Attorneys General offices from numerous states and the District of Columbia, and certain U.S. senators. Other Legal Matters 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 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 which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. 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 consolidated 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, 2020, the Company does not believe that material losses related to legal matters are probable. Reserves for legal matters totaled $1 million as of both December 31, 2020 and December 31, 2019. Reserves for General and Professional Liability Claims |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The Company's DIS business is the only reportable segment based on the manner in which the Chief Executive Officer, who is the Company's chief operating decision maker ("CODM"), assesses performance and allocates resources across the organization. The DIS business provides diagnostic information services to a broad range of customers, including patients, clinicians, hospitals, IDNs, health plans, employers, ACOs, and DCEs. The Company is the world's leading provider of diagnostic information services, which includes providing information and insights based on the industry-leading menu of routine, non-routine and advanced clinical testing and anatomic pathology testing, and other diagnostic information services. The DIS business accounted for greater than 95% of net revenues in 2020, 2019 and 2018. All other operating segments include the Company's DS businesses, which consist of its risk assessment services and healthcare information technology businesses. The Company's DS businesses are the leading provider of risk assessment services for the life insurance industry and offer healthcare organizations and clinicians robust information technology solutions. As of December 31, 2020, 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, 2020, 2019 and 2018. Segment asset information is not presented since it is not used by the CODM 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 and other operating income and expenses, net of certain general corporate activity costs that are allocated to the DIS and DS businesses. The accounting policies of the segments are the same as those of the Company as set forth in Note 2. 2020 2019 2018 Net revenues: DIS business $ 9,139 $ 7,405 $ 7,204 All other operating segments 298 321 327 Total net revenues $ 9,437 $ 7,726 $ 7,531 Operating earnings (loss): DIS business $ 2,201 $ 1,298 $ 1,235 All other operating segments 39 42 47 General corporate activities (269) (109) (181) Total operating income 1,971 1,231 1,101 Non-operating expenses, net (87) (155) (175) Income from continuing operations before income taxes and equity in earnings of equity method investees 1,884 1,076 926 Income tax expense (460) (247) (182) Equity in earnings of equity method investees, net of taxes 75 57 44 Income from continuing operations 1,499 886 788 Income from discontinued operations, net of taxes — 20 — Net income 1,499 906 788 Less: Net income attributable to noncontrolling interests 68 48 52 Net income attributable to Quest Diagnostics $ 1,431 $ 858 $ 736 Depreciation and amortization expense for the years ended December 31, 2020, 2019 and 2018 were as follows: 2020 2019 2018 DIS business $ 249 $ 226 $ 213 All other operating segments 8 6 6 General corporate 104 97 90 Total depreciation and amortization $ 361 $ 329 $ 309 Capital expenditures for the years ended December 31, 2020, 2019 and 2018 were as follows: 2020 2019 2018 DIS business $ 394 $ 373 $ 330 All other operating segments 15 20 16 General corporate 9 7 37 Total capital expenditures $ 418 $ 400 $ 383 Net revenues by major service for the years ended December 31, 2020, 2019 and 2018 were as follows: 2020 2019 2018 Routine clinical testing services $ 3,836 $ 4,206 $ 4,217 COVID-19 testing services 2,723 — — Gene-based and esoteric (including advanced diagnostics) testing services 2,098 2,620 2,409 Anatomic pathology testing services 482 579 578 All other 298 321 327 Total net revenues $ 9,437 $ 7,726 $ 7,531 |
RELATED PARTIES
RELATED PARTIES | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, 2019 and 2018, the Company recognized net revenues of $34 million, $35 million, and $36 million, respectively, associated with diagnostic information services provided to its equity method investees. As of December 31, 2020 and 2019, there was $3 million and $4 million, respectively, of accounts receivable from equity method investees related to such services. During the years ended December 31, 2020 and 2019, the Company recognized net revenues of $3 million and $8 million, respectively, associated with diagnostic information services provided to a noncontrolling interest partner in a joint venture. As of December 31, 2019, there was $4 million of receivables from the noncontrolling interest partner included in accounts receivable and other assets in the consolidated balance sheet related to such services. During the years ended December 31, 2020, 2019 and 2018, the Company recognized income of $16 million, $15 million and $15 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, 2020 and 2019, there was $3 million and $1 million, respectively, of other receivables from equity method investees included in prepaid expenses and other current assets in the consolidated balance sheet related to these service agreements and other transition related items. In addition, accounts payable and accrued expenses in the consolidated balance sheet as of December 31, 2020 and 2019 included $1 million and $2 million, respectively, due to equity method investees. During the years ended December 31, 2020, 2019 and 2018, the Company received dividends from its equity method investees of $54 million, $48 million, and $74 million, respectively. During the year ended December 31, 2018, the Company contributed $10 million to an equity method investee to fund its share of an acquisition made by the equity method investee. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS Discontinued operations, net of taxes, for the year ended December 31, 2019 includes discrete tax benefits of $20 million associated with the favorable resolution of certain tax contingencies related to NID. In addition, net cash provided by operating activities in the consolidated statement of cash flows for the year ended December 31, 2019 included a $28 million refund from the taxing authorities related to discontinued operations. |
Quarterly Operating Results (un
Quarterly Operating Results (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data [Abstract] | |
Quarterly Operating Results (unaudited) | 2020 (a) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (b) (c) (d) (e) (f) Net revenues $ 1,822 $ 1,827 $ 2,786 $ 3,002 $ 9,437 Gross profit 552 606 1,206 1,269 3,633 Income from continuing operations 106 193 591 609 1,499 Income from discontinued operations, net of taxes — — — — — Net income 106 193 591 609 1,499 Less: Net income attributable to noncontrolling interests 7 8 23 30 68 Net income attributable to Quest Diagnostics $ 99 $ 185 $ 568 $ 579 $ 1,431 Earnings per share attributable to Quest Diagnostics' common stockholders - basic: Income from continuing operations $ 0.74 $ 1.38 $ 4.20 $ 4.28 $ 10.62 Income from discontinued operations — — — — — Net income $ 0.74 $ 1.38 $ 4.20 $ 4.28 $ 10.62 Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: Income from continuing operations $ 0.73 $ 1.36 $ 4.14 $ 4.21 $ 10.47 Income from discontinued operations — — — — — Net income $ 0.73 $ 1.36 $ 4.14 $ 4.21 $ 10.47 2019 (a) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (g) (h) (i) (j) Net revenues $ 1,891 $ 1,953 $ 1,956 $ 1,926 $ 7,726 Gross profit 647 688 692 662 2,689 Income from continuing operations 176 219 226 265 886 Income from discontinued operations, net of taxes — 20 — — 20 Net income 176 239 226 265 906 Less: Net income attributable to noncontrolling interests 12 13 11 12 48 Net income attributable to Quest Diagnostics $ 164 $ 226 $ 215 $ 253 $ 858 Earnings per share attributable to Quest Diagnostics' common stockholders - basic: Income from continuing operations $ 1.22 $ 1.52 $ 1.59 $ 1.88 $ 6.21 Income from discontinued operations — 0.15 — — 0.15 Net income $ 1.22 $ 1.67 $ 1.59 $ 1.88 $ 6.36 Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: Income from continuing operations $ 1.20 $ 1.51 $ 1.56 $ 1.86 $ 6.13 Income from discontinued operations — 0.15 — — 0.15 Net income $ 1.20 $ 1.66 $ 1.56 $ 1.86 $ 6.28 (a) During the third quarter of 2006, the Company completed the wind down of Nichols Institute Diagnostics ("NID"), a test kit manufacturing subsidiary. As a result, NID was classified as discontinued operations through 2019, at which point certain income tax contingencies related to NID were resolved (see Note 21 to the audited consolidated financial statements). (b) Included pre-tax amortization expense of $28 million ($25 million in amortization of intangible assets and $3 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $16 million ($7 million in cost of services and $9 million in selling, general and administrative expenses), primarily associated with systems conversions and integration incurred in connection with further restructuring and integrating the Company; and pre-tax charges of $9 million ($1 million in cost of services, $3 million in selling, general and administrative expenses and $5 million in other operating expense (income), net), associated with certain costs incurred as a result of the COVID-19 pandemic and resulting impact on the economy including incremental costs incurred primarily to protect the health and safety of the Company's employees and customers and to transition certain employees to a remote work environment, and certain asset impairment charges; partially offset by excess tax benefits associated with stock-based compensation arrangements of $8 million recorded in income tax expense. (c) Included pre-tax amortization expense of $28 million ($25 million in amortization of intangible assets and $3 million in equity in earnings of equity method investees, net of taxes); and pre-tax charges of $9 million ($3 million in cost of services and $6 million in selling, general and administrative expenses), representing costs primarily associated with systems conversions and integration incurred in connection with further restructuring and integrating the Company; partially offset by a pre-tax gain of $26 million (charges of $34 million in cost of services and $5 million in selling, general and administrative expenses, offset by a $62 million gain in other operating expense (income), net, and a $3 million gain in equity in earnings of equity method investees, net of taxes), representing certain items resulting from the COVID-19 pandemic, including expense associated with a payment to eligible employees to help offset expenses they incurred as a result of COVID-19, incremental costs incurred primarily to protect the health and safety of the Company's employees and customers, and certain impairment charges, which were more than offset by $65 million of income recognized attributable to the receipt of the initial tranche of funds from the government that were appropriated to healthcare providers under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"); and excess tax benefits associated with stock-based compensation arrangements of $4 million recorded in income tax expense. (d) Included net pre-tax charges of $69 million (charges of $3 million in cost of services, $65 million in other operating expense (income), net, and $1 million in equity in earnings of equity method investees, net of taxes), representing the impact of certain items resulting from the COVID-19 pandemic, including incremental costs incurred primarily to protect the health and safety of the Company's employees and customers and the reversal of $65 million of income previously recognized during the second quarter of 2020 attributable to the receipt of funds from the government that were appropriated to healthcare providers under the CARES Act; pre-tax amortization expense of $30 million ($27 million in amortization of intangible assets and $3 million in equity in earnings of equity method investees, net of taxes); and pre-tax charges of $18 million ($11 million in cost of services and $7 million in selling, general and administrative expenses), representing costs primarily associated with systems conversions and integration incurred in connection with further restructuring and integrating the Company; partially offset by a pre-tax gain of $70 million recognized in other income (expense), net upon the acquisition of the remaining 56% interest in Mid America Clinical Laboratories, LLC as a result of the remeasurement of the Company's previously held equity interest to fair value; and excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense. (e) Included pre-tax amortization expense of $28 million ($26 million in amortization of intangible assets and $2 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $20 million (charges of $19 million in cost of services, $2 million in selling, general and administrative expenses and $1 million in other operating expense (income), net, partially offset by a $2 million gain in equity in earnings of equity method investees, net of taxes), representing the impact of certain items resulting from the COVID-19 pandemic, principally including expense associated with payments to eligible employees to help offset expenses they incurred as a result of COVID-19 and incremental costs incurred primarily to protect the health and safety of the Company's employees and customers; and pre-tax charges of $15 million ($6 million in cost of services and $9 million in selling, general and administrative expenses), primarily associated with systems conversions and integration incurred in connection with further restructuring and integrating the Company; partially offset by a pre-tax gain of $2 million ($2 million of charges in selling, general and administrative expenses and a $10 million loss in other income (expense), net, offset by a $14 million gain in equity in earnings of equity method investees, net of taxes) related to costs associated with Quest for Health Equity (the Company's recently announced initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities) and a loss on retirement of debt, which were more than offset by a gain recognized by an equity method investee to adjust certain of its investments to fair value; and excess tax benefits associated with stock-based compensation arrangements of $8 million recorded in income tax expense. In the fourth quarter of 2020, the Company returned the funds received from the government that were appropriated to healthcare providers under the CARES Act. (f) The sum of basic and diluted earnings per share attributable to Quest Diagnostics' common stockholders for the four quarters of 2020 did not equal the totals for the year ended December 31, 2020 due to quarterly fluctuations in the Company's earnings and weighted average common shares outstanding throughout the period primarily due to the impact of the COVID-19 pandemic on the Company's results and the temporary suspension of repurchases under the Company's share repurchase program. (g) Included pre-tax amortization expense of $29 million ($24 million in amortization of intangible assets and $5 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $22 million ($11 million in cost of services and $11 million in selling, general and administrative expenses), primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company; a pre-tax gain of $8 million ($1 million charge in selling, general and administrative expenses offset by a $9 million gain in other operating expense (income), net), due to non-cash asset impairment charges, which were more than offset by a gain associated with proceeds from an insurance claim for hurricane related losses; and excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense. (h) Included pre-tax amortization expense of $30 million ($25 million in amortization of intangible assets and $5 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $26 million ($11 million in cost of services and $15 million in selling, general and administrative expenses), primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company; a pre-tax gain of $6 million in other operating expense (income), net, primarily due to a gain associated with the decrease in the fair value of the contingent consideration accrual associated with a previous acquisition; and excess tax benefits associated with stock-based compensation arrangements of $5 million recorded in income tax expense. Income from discontinued operations, net of taxes includes discrete tax benefits of $20 million associated with the favorable resolution of certain tax contingencies related to NID. (i) Included pre-tax amortization expense of $25 million ($23 million in amortization of intangible assets and $2 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $16 million ($7 million in cost of services and $9 million in selling, general and administrative expenses), primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company; a pre-tax gain of $3 million ($4 million charge in selling, general and administrative expenses, offset by a $7 million gain in other operating expense (income), net), consisting of costs incurred related to the AMCA Data Security Incident, which were more than offset by a gain associated with the decrease in the fair value of the contingent consideration accrual associated with a previous acquisition; and excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense. (j) Includes a pre-tax gain of $72 million ($1 million charge in selling, general and administrative expenses, offset by a $73 million gain in other operating expense (income), net), primarily associated with the sale and leaseback of a property; pre-tax amortization expense of $27 million ($24 million in amortization of intangible assets and $3 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $14 million ($6 million in cost of services and $8 million in selling, general and administrative expenses), primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company; and excess tax benefits associated with stock-based compensation arrangements of $2 million recorded in income tax expense. |
Schedule II - Valuation Account
Schedule II - Valuation Accounts and Reserves | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
SCHEDULE II - VALUATION ACCOUNTS AND RESERVES | QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES SCHEDULE II - VALUATION ACCOUNTS AND RESERVES (in millions) Balance at Provision for Credit Losses Net Deductions Balance at 2020 Allowance for credit losses $ 15 $ 19 $ 6 (a) $ 28 2019 Doubtful accounts and allowances $ 15 $ 11 $ 11 (a) $ 15 2018 Doubtful accounts and allowances $ 13 $ 6 $ 4 (a) $ 15 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | 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. Additionally, the consolidated financial statements include the accounts of variable interest entities (“VIEs”) in which the Company has a variable interest and for which the Company is the “primary beneficiary” as it has both: (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE. All significant intercompany accounts and transactions are eliminated in consolidation. Income attributable to the minority interest in the Company's majority owned and controlled consolidated subsidiaries is recorded as net income attributable to noncontrolling interests in the consolidated statements of operations and the noncontrolling interest is reflected as a separate component of consolidated stockholders' equity in the consolidated balance sheet. |
Basis of Presentation | During the third quarter of 2006, the Company completed the wind down of Nichols Institute Diagnostics ("NID"), a test kit manufacturing subsidiary. The accompanying consolidated statements of operations and related disclosures report the results of NID as discontinued operations through 2019, at which point certain income tax contingencies related to NID were resolved. See Note 21 for a further discussion of discontinued operations. |
Reclassifications | Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. |
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 sheet. 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. |
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 recognizes as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods sold or services rendered primarily upon completion of the testing process (when results are reported) or when services have been rendered (see Note 3). Net revenues from Medicare and Medicaid programs were approximately 11%, 15% and 16% of the Company's consolidated net revenues for the years ended December 31, 2020, 2019 and 2018, respectively. |
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 attributable to Quest Diagnostics, 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 attributable to Quest Diagnostics, 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 measures stock-based compensation for equity awards at fair value on the date of grant and 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 units allow the recipients of such awards to earn a variable number of shares based on the achievement of the performance goals, which are based on the financial performance of the Company and the total shareholder return of the Company relative to an index of peer companies ("relative TSR"), specified in the awards. For performance share units with a goal based on the financial performance of the Company, stock-based compensation expense 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 for these awards is recognized as compensation cost in earnings in the period of the change. For performance share units with a market-based relative TSR goal, stock-based compensation expense is recognized based on the estimated fair value of the award regardless of the actual number of shares earned. For further details regarding stock-based compensation, see Note 17. |
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 expense (income), net in the consolidated statements of operations. Foreign currency 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 timely. As of December 31, 2020 and 2019, receivables due from government payers under the Medicare and Medicaid programs represented approximately 6% and 11%, 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 December 31, 2020 and 2019, receivables due from patients represented approximately 11% and 20%, respectively, of the Company's consolidated net accounts receivable. The Company applies assumptions and judgments including historical collection experience (including the period the receivables have been outstanding) for assessing collectability and determining net revenues and accounts receivable from patients. |
Accounts Receivable and Allowance for Credit Losses | Accounts receivable are reported net of allowances for credit losses. When estimating its allowance for credit losses, the Company pools its trade receivables based on the following customer types: healthcare insurers, government payers, client payers and patients, which are described in Note 3. The Company principally estimates the allowance for credit losses by pool based on historical collection experience, the current credit worthiness of the customers, current economic conditions, expectations of future economic conditions and the period that the receivables have been outstanding. To the extent that any individual payers are identified that have deteriorated in credit quality, the Company removes the customers from their respective pools and establishes allowances based on the individual risk characteristics of such customers. |
Inventories | Inventories, which consist principally of finished goods testing supplies and reagents, are valued at the lower of cost (first in, first out method) or net realizable value. |
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, 2020 as follows: • buildings and improvements, ranging up to thirty-one and a half years; • laboratory equipment and furniture and fixtures, ranging from five • 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 |
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 exceeds its fair value. On a quarterly basis, the Company performs a review of its 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 goodwill test is performed at least annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. 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; the qualitative test may be performed prior to, or as an alternative to, performing a 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 the Company is required to perform the quantitative goodwill impairment test. Otherwise, no further analysis is required. Additionally, the Company's policy is to update the fair value calculation of its reporting units and perform the quantitative goodwill impairment test on a periodic basis. The quantitative impairment test involves the comparison of the fair value of the reporting unit to its carrying value. The Company calculates the fair value of each reporting unit using either (i) a discounted cash flows analysis that converts future cash flow amounts into a single discounted present value amount or (ii) a market approach. The Company assesses the valuation methodology based upon the relevance and availability of the data at the time that the valuation is performed. The Company 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, an impairment loss will be recognized in the amount of the excess. The Company performs its annual impairment test during the fourth quarter of the fiscal year. For the year ended December 31, 2020, in accordance with its policy to perform the quantitative test on a periodic basis, the Company updated the fair value calculation of its reporting units, performed the quantitative impairment test and concluded that goodwill was not impaired. For the year ended December 31, 2019, the Company performed a qualitative impairment test and, based on the totality of information available for the reporting units, the Company concluded that it was more-likely-than-not that the estimated fair values of the reporting units were greater than the carrying values of the reporting units and, as such, no further analysis was required. |
Intangible Assets | Intangible assets are recognized at fair value, as an asset apart from goodwill if the asset (i) arises from contractual or other legal rights, or (ii) 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 lives, which generally range from five 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 an indefinite-lived intangible 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 quarters of the years ended December 31, 2020 and 2019, 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 these 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 (except for those accounted for under the equity method of accounting), are included in other assets in the consolidated balance sheet and include: • Equity investments with readily determinable fair values which are comprised of 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 17). These investments are measured at fair value with both realized and unrealized gains and losses recorded in current earnings within other income (expense), net in the consolidated statements of operations. For the years ended December 31, 2020, 2019 and 2018, gains and (losses) from these equity securities totaled $8 million, $10 million, and $(2) million, respectively. The carrying value of these investments were $67 million and $59 million at December 31, 2020 and 2019, respectively. • Equity investments that do not have readily determinable fair values, which consist of investments in preferred and common shares of privately held companies. These investments are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes. The Company regularly evaluates these equity investments to determine if there are any indicators that the investment is impaired; no impairment charges were recognized related to these investments for the years ended December 31, 2020, 2019, and 2018. The carrying value of these investments was $25 million at both December 31, 2020 and 2019. • Available-for-sale debt securities of privately-held companies. These investments are measured at fair value with unrealized gains and losses presented in other comprehensive income (loss). The carrying amount of these investments was $12 million at both December 31, 2020 and 2019. |
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 historically entered into interest rate swap agreements. Interest rate swap agreements 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, net. |
Comprehensive Income (Loss) | Comprehensive income (loss) encompasses all changes in stockholders' equity (except those arising from transactions with stockholders) and includes: • Foreign currency translation adjustments; • Net changes in available-for-sale debt securities, which represent unrealized holding gains (losses), net of tax, on available-for-sale debt securities; and |
New Accounting Standards | Adoption of New Accounting Standards On January 1, 2020, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board ("FASB") which aligns the requirements for deferring implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The adoption of this standard, which the Company elected to do on a prospective basis, did not have a material impact on the Company's consolidated results of operations, financial position or cash flows. On January 1, 2020, the Company adopted a new accounting standard issued by the FASB 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 requires entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. The adoption of this new standard, which was done using a modified retrospective transition approach, did not have a material impact on the Company's consolidated results of operations, financial position or cash flows. See "Accounts Receivable and Allowance for Credit Losses" in this footnote for further details on the Company's allowance for credit losses policy. On January 1, 2019, the Company adopted a new accounting standard issued by the FASB on accounting for leases using the modified retrospective method. This new accounting standard requires a lessee to recognize on its balance sheet an asset and liability for most leases. The Company elected the optional transition method that allowed for a cumulative-effect adjustment to the opening balance of retained earnings recorded on January 1, 2019 and did not restate previously reported results in the comparative periods. The Company also elected the package of practical expedients, which among other things, allowed it to carry forward its historical lease classification. As a result of adoption of the new standard, the Company recorded operating lease assets and lease liabilities of approximately $500 million and $550 million, respectively as of January 1, 2019. The operating lease liability was determined based on the present value of the remaining minimum rental payments and the operating lease asset was determined based on the value of the lease liability, adjusted for the deferred rent balances of approximately $50 million, which were previously included in accounts payable and accrued expenses as well as other liabilities in the consolidated balance sheet. Accounting for the Company's finance leases remained substantially unchanged. The adoption of the new standard did not materially impact the Company's consolidated results of operations or cash flows. In addition, the adoption of this new accounting standard resulted in increased qualitative and quantitative disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases. For further details, see Note 14. New Accounting Standards To Be Adopted |
Leases | The Company determines if an arrangement is or contains a lease at contract inception. The Company leases office space, patient service centers, clinical laboratories, warehouses, logistic hubs and equipment primarily through operating leases, with a limited number of finance leases. A right-of-use asset, representing the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the right-of-use asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The approximate percentage of net revenue by type of customer was as follows: Year Ended December 31, 2020 2019 2018 Healthcare insurers: Fee-for-service 34 % 33 % 32 % Capitated 3 3 3 Total healthcare insurers 37 36 35 Government payers 11 15 16 Client payers 38 32 32 Patients 11 13 13 Total DIS 97 96 96 DS 3 4 4 Net revenues 100 % 100 % 100 % |
Accounts Receivable Disaggregation | The approximate percentage of net accounts receivable by type of customer as of December 31, 2020 and 2019 was as follows: 2020 2019 Healthcare insurers 34% 22% Government payers 6 11 Client payers 46 42 Patients (including coinsurance and deductible responsibilities) 11 20 Total DIS 97 95 DS 3 5 Net accounts receivable 100% 100% |
Accounts Receivable, Allowance for Credit Loss | The following table summarizes the activity for the Company's allowance for credit losses during the year ended December 31, 2020, which principally relates to client payers: Allowance for Credit Losses Balance, January 1, 2020 $ 15 Provision for credit losses 19 Write-offs of accounts receivable, net of recoveries (6) Balance, December 31, 2020 $ 28 |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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): 2020 2019 2018 Amounts attributable to Quest Diagnostics’ common stockholders: Income from continuing operations $ 1,431 $ 838 $ 736 Income from discontinued operations, net of taxes — 20 — Net income attributable to Quest Diagnostics' common stockholders $ 1,431 $ 858 $ 736 Income from continuing operations $ 1,431 $ 838 $ 736 Less: Earnings allocated to participating securities 6 3 3 Earnings available to Quest Diagnostics’ common stockholders – basic and diluted $ 1,425 $ 835 $ 733 Weighted average common shares outstanding – basic 134 134 136 Effect of dilutive securities: Stock options and performance share units 2 2 3 Weighted average common shares outstanding – diluted 136 136 139 Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: Income from continuing operations $ 10.62 $ 6.21 $ 5.39 Income from discontinued operations — 0.15 — Net income $ 10.62 $ 6.36 $ 5.39 Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: Income from continuing operations $ 10.47 $ 6.13 $ 5.29 Income from discontinued operations — 0.15 — Net income $ 10.47 $ 6.28 $ 5.29 |
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: 2020 2019 2018 Stock options and performance share units 1 3 2 |
RESTRUCTURING ACTIVITIES (Table
RESTRUCTURING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 for the years ended December 31, 2020, 2019 and 2018: 2020 2019 2018 Employee separation costs $ 14 $ (3) $ 45 Facility-related costs — 1 4 Asset impairment charges — — 2 Total restructuring charges $ 14 $ (2) $ 51 |
Schedule of Activity of Restructuring Liability | The following table summarizes the activity of the restructuring liability during 2020 and 2019, which is included in accrued expenses in Note 12: Employee Separation Costs Facility-Related Costs Total Balance, December 31, 2018 $ 37 $ 1 $ 38 Income statement income (3) — (3) Cash payments (25) — (25) Other — (1) (1) Balance, December 31, 2019 9 — 9 Income statement expense 14 — 14 Cash payments (16) — (16) Balance, December 31, 2020 $ 7 $ — $ 7 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | 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, 2020 Assets: Trading securities $ 67 $ 67 $ — $ — Cash surrender value of life insurance policies 50 — 50 — Available-for-sale debt securities 12 — — 12 Total $ 129 $ 67 $ 50 $ 12 Liabilities: Deferred compensation liabilities $ 126 $ — $ 126 $ — Redeemable noncontrolling interest $ 82 $ — $ — $ 82 December 31, 2019 Assets: Trading securities $ 59 $ 59 $ — $ — Cash surrender value of life insurance policies 43 — 43 — Available-for-sale debt securities 12 — — 12 Total $ 114 $ 59 $ 43 $ 12 Liabilities: Deferred compensation liabilities $ 110 $ — $ 110 $ — Fixed-to-variable interest rate swaps 28 — 28 — Contingent consideration 7 — — 7 Total $ 145 $ — $ 138 $ 7 Redeemable noncontrolling interest $ 76 $ — $ — $ 76 |
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, 2018 $ 14 Purchases, additions and issuances 6 Settlements (1) Total (gains)/losses included in earnings - realized/unrealized (12) Balance, December 31, 2019 7 Settlements (6) Total (gains)/losses included in earnings - realized/unrealized (1) Balance, December 31, 2020 $ — |
TAXES ON INCOME (Tables)
TAXES ON INCOME (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense | The components of income tax expense (benefit) for 2020, 2019 and 2018 were as follows: 2020 2019 2018 Current: Federal $ 300 $ 176 $ 82 State and local 74 53 26 Foreign 1 3 1 Deferred: Federal 55 21 66 State and local 29 (4) 10 Foreign 1 (2) (3) Total $ 460 $ 247 $ 182 |
Reconciliation of the Federal Statutory Rate | A reconciliation of the federal statutory income tax rate to the Company's effective income tax rate for 2020, 2019 and 2018 was as follows: 2020 2019 2018 Tax provision at statutory rate 21.0 % 21.0 % 21.0 % State and local income taxes, net of federal benefit 4.5 4.6 4.7 Impact of noncontrolling interests (0.9) (1.1) (1.4) Excess tax benefits on stock-based compensation arrangements (1.2) (1.2) (1.9) Return to provision true-ups (0.7) (1.4) (1.4) Change in accounting method — — (1.6) Impact of equity earnings 0.8 1.1 1.0 Changes in reserves for uncertain tax positions 0.9 1.7 (0.8) Change in valuation allowances associated with certain net operating losses 0.2 (1.1) — Other, net (0.1) (0.6) 0.1 Effective tax rate 24.5 % 23.0 % 19.7 % |
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, 2020 and 2019 were as follows: 2020 2019 Non-current deferred tax assets (liabilities): Accounts receivable reserves $ 71 $ 64 Liabilities not currently deductible 146 126 Stock-based compensation 47 35 Basis differences in investments, joint ventures and subsidiaries (81) (80) Net operating loss carryforwards, net of valuation allowance 61 75 Operating lease right-of-use assets (151) (129) Operating lease liabilities 161 139 Depreciation and amortization (604) (494) Total non-current deferred tax liabilities, net $ (350) $ (264) |
Schedule of Unrecognized Benefits | The total amount of unrecognized tax benefits as of and for the years ended December 31, 2020, 2019 and 2018 consisted of the following: 2020 2019 2018 Balance, beginning of year $ 88 $ 107 $ 115 Additions: For tax positions of current year 2 2 2 For tax positions of prior years 25 16 11 Reductions: Changes in judgment (9) (3) (6) Expirations of statutes of limitations (4) (2) (15) Settlements (9) (32) — Balance, end of year $ 93 $ 88 $ 107 |
SUPPLEMENTAL CASH FLOW AND OT_2
SUPPLEMENTAL CASH FLOW AND OTHER DATA (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow and Other Data | Supplemental cash flow and other data for the years ended December 31, 2020, 2019 and 2018 was as follows: 2020 2019 2018 Depreciation expense $ 258 $ 233 $ 219 Amortization expense 103 96 90 Depreciation and amortization expense $ 361 $ 329 $ 309 Interest expense $ (166) $ (180) $ (169) Interest income 3 5 2 Interest expense, net $ (163) $ (175) $ (167) Interest paid $ 201 $ 192 $ 174 Income taxes paid $ 360 $ 202 $ 84 Accounts payable associated with capital expenditures $ 46 $ 26 $ 11 Accounts payable associated with purchases of treasury stock $ — $ — $ 3 Dividend payable $ 76 $ 71 $ 71 Businesses acquired: Fair value of assets acquired $ 368 $ 63 $ 453 Fair value of liabilities assumed 17 — 7 Fair value of net assets acquired 351 63 446 Merger consideration payable — (5) (19) Cash paid for business acquisitions 351 58 427 Less: Cash acquired 21 — 6 Business acquisitions, net of cash acquired $ 330 $ 58 $ 421 2020 2019 2018 Leases: Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 185 $ 180 Operating cash flows from finance leases $ 3 $ 3 Financing cash flows from finance leases $ 3 $ 4 Leased assets obtained in exchange for new operating lease liabilities $ 219 $ 164 Leased assets obtained in exchange for new finance lease liabilities (a) $ — $ 1 $ 1 (a) For the year ended December 31, 2018, leased assets obtained in exchange for new finance lease liabilities reflects information prior to the adoption of the new accounting standard for leases on January 1, 2019. See Note 14 for further discussion of the Company's accounting for leases. |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, plant and equipment as of December 31, 2020 and 2019 consisted of the following: 2020 2019 Land $ 42 $ 25 Buildings and improvements 526 341 Laboratory equipment and furniture and fixtures 1,974 1,788 Leasehold improvements 666 639 Computer software developed or obtained for internal use 1,209 1,106 Construction-in-progress 202 330 4,619 4,229 Less: Accumulated depreciation and amortization (2,992) (2,776) Total $ 1,627 $ 1,453 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Goodwill, Net | The changes in goodwill for the years ended December 31, 2020 and 2019 were as follows: 2020 2019 Balance, beginning of year $ 6,619 $ 6,563 Goodwill acquired during the year 247 43 Adjustments to goodwill 7 13 Balance, end of year $ 6,873 $ 6,619 |
Intangible Assets Excluding Goodwill | Intangible assets as of December 31, 2020 and 2019 consisted of the following: Weighted 2020 2019 Cost Accumulated Net Cost Accumulated Net Amortizing intangible assets: Customer-related 17 $ 1,479 $ (638) $ 841 $ 1,367 $ (556) $ 811 Non-compete agreements 9 3 (2) 1 3 (2) 1 Technology 15 141 (65) 76 104 (56) 48 Other 9 108 (95) 13 110 (85) 25 Total 17 1,731 (800) 931 1,584 (699) 885 Intangible assets not subject to amortization: Trade names 235 — 235 235 — 235 Other 1 — 1 1 — 1 Total intangible assets $ 1,967 $ (800) $ 1,167 $ 1,820 $ (699) $ 1,121 |
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, 2020 is as follows: Year Ending December 31, 2021 $ 101 2022 98 2023 96 2024 93 2025 92 Thereafter 451 Total $ 931 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and accrued expenses as of December 31, 2020 and 2019 consisted of the following: 2020 2019 Accrued wages and benefits (including incentive compensation) $ 502 $ 287 Trade accounts payable 446 263 Accrued expenses 356 223 Overdrafts 153 88 Dividend payable 76 71 Income taxes payable 43 27 Accrued insurance 31 30 Accrued interest 26 45 Merger consideration payable — 7 Total $ 1,633 $ 1,041 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Instruments [Abstract] | |
Long-term Debt | Long-term debt (including finance lease obligations) as of December 31, 2020 and 2019 consisted of the following: 2020 2019 4.75% Senior Notes due January 2020 $ — $ 500 2.50% Senior Notes due March 2020 — 300 4.70% Senior Notes due April 2021 — 554 4.25% Senior Notes due April 2024 316 308 3.50% Senior Notes due March 2025 622 593 3.45% Senior Notes due June 2026 512 490 4.20% Senior Notes due June 2029 499 499 2.95% Senior Notes due June 2030 798 798 2.80% Senior Notes due June 2031 549 — 6.95% Senior Notes due July 2037 175 175 5.75% Senior Notes due January 2040 245 245 4.70% Senior Notes due March 2045 300 300 Other 27 34 Debt issuance costs (28) (26) Total long-term debt 4,015 4,770 Less: Current portion of long-term debt 2 804 Total long-term debt, net of current portion $ 4,013 $ 3,966 |
Schedule of Leverage Ratio Covenants | As amended, the leverage ratio covenant (as defined in the Credit Facility) was increased as follows: As of: Applicable Covenant: December 31, 2020 no more than 6.5 times EBITDA March 31, 2021 no more than 6.25 times EBITDA June 30, 2021 no more than 4.5 times EBITDA |
Schedule of Maturities of Long-term Debt | As of December 31, 2020, long-term debt matures as follows: Year Ending December 31, 2021 $ 2 2022 1 2023 1 2024 302 2025 602 Thereafter 3,095 Total maturities of long-term debt 4,003 Unamortized discount (11) Debt issuance costs (28) Fair value basis adjustments attributable to hedged debt 51 Total long-term debt 4,015 Less: Current portion of long-term debt 2 Total long-term debt, net of current portion $ 4,013 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule Of Lease By Asset Type | The Company's assets and liabilities for its lease agreements as of December 31, 2020 and 2019 were as follows: Leases Balance Sheet Classification 2020 2019 Assets Operating Operating lease right-of-use assets $ 604 $ 518 Finance Property, plant and equipment, net (a) 22 35 Total lease assets $ 626 $ 553 Liabilities Current: Operating Current portion of long-term operating lease liabilities $ 141 $ 145 Finance Current portion of long-term debt 2 3 Non-current: Operating Long-term operating lease liabilities 499 413 Finance Long-term debt 25 30 Total lease liabilities $ 667 $ 591 (a) Finance lease assets as of December 31, 2020 and 2019 were recorded net of accumulated amortization of $14 million and $24 million, respectively. |
Lease, Cost | Components of lease cost for the years ended December 31, 2020 and 2019 were as follows: Lease cost 2020 2019 Operating lease cost (a) $ 300 $ 294 Finance lease cost: Amortization of leased assets 6 7 Interest on lease liabilities 3 3 Net lease cost $ 309 $ 304 (a) Includes short-term leases and variable lease costs (primarily usage-based maintenance fees and utilities related to real estate leases and certain equipment-related and vehicle-related costs) of $120 million for each of the years ended December 31, 2020 and 2019. |
Operating Lease, Liability, Maturity | The maturity of the Company's lease liabilities as of December 31, 2020 is as follows: Maturity of lease liabilities Operating leases Finance leases Total 2021 $ 160 $ 4 $ 164 2022 140 3 143 2023 122 3 125 2024 87 3 90 2025 57 3 60 Thereafter 153 28 181 Total lease payments 719 44 763 Less: Interest 79 17 96 Present value of lease liabilities $ 640 $ 27 $ 667 |
Finance Lease, Liability, Maturity | The maturity of the Company's lease liabilities as of December 31, 2020 is as follows: Maturity of lease liabilities Operating leases Finance leases Total 2021 $ 160 $ 4 $ 164 2022 140 3 143 2023 122 3 125 2024 87 3 90 2025 57 3 60 Thereafter 153 28 181 Total lease payments 719 44 763 Less: Interest 79 17 96 Present value of lease liabilities $ 640 $ 27 $ 667 |
Schedule of Lease Term and Discount Rate | Lease term and discount rate as of December 31, 2020 and 2019 were as follows: Lease term and discount rate 2020 2019 Weighted-average remaining lease term (years): Operating leases 6 5 Finance leases 13 12 Weighted-average discount rate: Operating leases 3.2 % 3.4 % Finance leases 8.1 % 8.7 % |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Debt Instrument Fair Value Basis Adjustment Attributable to Hedged Debt | As of December 31, 2020 and 2019, the following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges included in the carrying amount of long-term debt: Carrying Amount of Hedged Long-Term Debt Hedge Accounting Basis Adjustment (a) Carrying Amount of Hedged Long-Term Debt Hedge Accounting Basis Adjustment (a) Balance Sheet Classification December 31, 2020 December 31, 2020 December 31, 2019 December 31, 2019 Long-term debt $ — $ 51 $ 1,186 $ (3) |
Schedule of Fair Value Hedging Instruments and Hedged Item, Statement of Financial Performance, Location | The following table presents the effect of fair value hedge accounting on the consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018, respectively: 2020 2019 2018 Other income (expense), net Other income (expense), net Other income (expense), net Total for line item in which the effects of fair value hedges are recorded $ 76 $ 20 $ (8) Gain (loss) on fair value hedging relationships: Hedged items (Long-term debt) $ (68) $ (65) $ 4 Derivatives designated as hedging instruments $ 68 $ 65 $ (4) |
Schedule of The Fair Values of Derivative Instruments | A summary of the fair values of derivative instruments in the consolidated balance sheet was as follows: December 31, 2019 Balance Sheet Fair Value Derivatives Designated as Hedging Instruments Fixed-to-variable interest rate swap agreements Other liabilities $ 28 |
STOCKHOLDERS_ EQUITY AND REDE_2
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Components of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive loss by component for 2020, 2019 and 2018 were as follows: Foreign Net Changes in Available-for-Sale Debt Securities Net Deferred Losses on Cash Flow Hedges, net of tax Other Accumulated Other Comprehensive Loss Balance, December 31, 2017 $ (38) $ — $ (9) $ (1) $ (48) Other comprehensive loss before reclassifications (15) — — — (15) Amounts reclassified from accumulated other comprehensive loss 4 — 2 — 6 Net current period other comprehensive (loss) income (11) — 2 — (9) Reclassification of stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act — — (2) — (2) Balance, December 31, 2018 (49) — (9) (1) (59) Other comprehensive income before reclassifications 7 8 3 — 18 Amounts reclassified from accumulated other comprehensive loss — — 2 — 2 Net current period other comprehensive income 7 8 5 — 20 Balance, December 31, 2019 (42) 8 (4) (1) (39) Other comprehensive income before reclassifications 12 — 1 — 13 Amounts reclassified from accumulated other comprehensive loss 3 — 2 — 5 Net current period other comprehensive income 15 — 3 — 18 Balance, December 31, 2020 $ (27) $ 8 $ (1) $ (1) $ (21) |
STOCK OWNERSHIP AND COMPENSAT_2
STOCK OWNERSHIP AND COMPENSATION PLANS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [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: 2020 2019 2018 Fair value at grant date $17.25 $14.30 $18.14 Expected volatility 20.3% 20.4% 19.1% Dividend yield 2.0% 2.4% 1.9% Risk-free interest rate 1.5% 2.5% 2.8% Expected holding period, in years 5.0 5.2 5.3 |
Summary of Transactions Under The Company's Stock Option Plans | The following summarizes the activity relative to stock option awards for 2020: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Options outstanding, beginning of year 8.0 $ 81.67 Options granted 1.1 112.23 Options exercised (2.6) 72.57 Options outstanding, end of year 6.5 $ 90.32 6.7 $ 187 Exercisable, end of year 3.9 $ 83.72 5.6 $ 138 Vested and expected to vest, end of year 6.4 $ 90.14 6.7 $ 185 |
Schedule of Assumptions Used in Valuing The Company's Performance Share Units | The weighted average assumptions used in valuing performance share units in 2020 with a market-based relative TSR goal were: Fair value at grant date $144.03 Expected volatility 20.1% Dividend yield 2.0% Risk-free interest rate 1.4% |
Summary of Transactions Under Stock Awards Other than Options | The following summarizes the activity relative to stock awards, including restricted stock units and performance share units, for 2020, 2019 and 2018: 2020 2019 2018 Shares Weighted Shares Weighted Shares Weighted Shares outstanding, beginning of year 1.0 $ 93.30 1.1 $ 88.13 1.3 $ 77.90 Shares granted 0.4 112.43 0.4 86.28 0.4 103.51 Shares vested (0.4) 96.36 (0.4) 75.58 (0.5) 74.00 Shares forfeited and canceled — — (0.1) 94.09 (0.1) 90.16 Shares outstanding, end of year 1.0 $ 100.12 1.0 $ 93.30 1.1 $ 88.13 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020, 2019 and 2018. Segment asset information is not presented since it is not used by the CODM 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 and other operating income and expenses, net of certain general corporate activity costs that are allocated to the DIS and DS businesses. The accounting policies of the segments are the same as those of the Company as set forth in Note 2. 2020 2019 2018 Net revenues: DIS business $ 9,139 $ 7,405 $ 7,204 All other operating segments 298 321 327 Total net revenues $ 9,437 $ 7,726 $ 7,531 Operating earnings (loss): DIS business $ 2,201 $ 1,298 $ 1,235 All other operating segments 39 42 47 General corporate activities (269) (109) (181) Total operating income 1,971 1,231 1,101 Non-operating expenses, net (87) (155) (175) Income from continuing operations before income taxes and equity in earnings of equity method investees 1,884 1,076 926 Income tax expense (460) (247) (182) Equity in earnings of equity method investees, net of taxes 75 57 44 Income from continuing operations 1,499 886 788 Income from discontinued operations, net of taxes — 20 — Net income 1,499 906 788 Less: Net income attributable to noncontrolling interests 68 48 52 Net income attributable to Quest Diagnostics $ 1,431 $ 858 $ 736 Depreciation and amortization expense for the years ended December 31, 2020, 2019 and 2018 were as follows: 2020 2019 2018 DIS business $ 249 $ 226 $ 213 All other operating segments 8 6 6 General corporate 104 97 90 Total depreciation and amortization $ 361 $ 329 $ 309 Capital expenditures for the years ended December 31, 2020, 2019 and 2018 were as follows: 2020 2019 2018 DIS business $ 394 $ 373 $ 330 All other operating segments 15 20 16 General corporate 9 7 37 Total capital expenditures $ 418 $ 400 $ 383 Net revenues by major service for the years ended December 31, 2020, 2019 and 2018 were as follows: 2020 2019 2018 Routine clinical testing services $ 3,836 $ 4,206 $ 4,217 COVID-19 testing services 2,723 — — Gene-based and esoteric (including advanced diagnostics) testing services 2,098 2,620 2,409 Anatomic pathology testing services 482 579 578 All other 298 321 327 Total net revenues $ 9,437 $ 7,726 $ 7,531 |
Quarterly Operating Results (_2
Quarterly Operating Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data [Abstract] | |
Quarterly Operating Results | 2020 (a) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (b) (c) (d) (e) (f) Net revenues $ 1,822 $ 1,827 $ 2,786 $ 3,002 $ 9,437 Gross profit 552 606 1,206 1,269 3,633 Income from continuing operations 106 193 591 609 1,499 Income from discontinued operations, net of taxes — — — — — Net income 106 193 591 609 1,499 Less: Net income attributable to noncontrolling interests 7 8 23 30 68 Net income attributable to Quest Diagnostics $ 99 $ 185 $ 568 $ 579 $ 1,431 Earnings per share attributable to Quest Diagnostics' common stockholders - basic: Income from continuing operations $ 0.74 $ 1.38 $ 4.20 $ 4.28 $ 10.62 Income from discontinued operations — — — — — Net income $ 0.74 $ 1.38 $ 4.20 $ 4.28 $ 10.62 Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: Income from continuing operations $ 0.73 $ 1.36 $ 4.14 $ 4.21 $ 10.47 Income from discontinued operations — — — — — Net income $ 0.73 $ 1.36 $ 4.14 $ 4.21 $ 10.47 2019 (a) First Quarter Second Quarter Third Quarter Fourth Quarter Total Year (g) (h) (i) (j) Net revenues $ 1,891 $ 1,953 $ 1,956 $ 1,926 $ 7,726 Gross profit 647 688 692 662 2,689 Income from continuing operations 176 219 226 265 886 Income from discontinued operations, net of taxes — 20 — — 20 Net income 176 239 226 265 906 Less: Net income attributable to noncontrolling interests 12 13 11 12 48 Net income attributable to Quest Diagnostics $ 164 $ 226 $ 215 $ 253 $ 858 Earnings per share attributable to Quest Diagnostics' common stockholders - basic: Income from continuing operations $ 1.22 $ 1.52 $ 1.59 $ 1.88 $ 6.21 Income from discontinued operations — 0.15 — — 0.15 Net income $ 1.22 $ 1.67 $ 1.59 $ 1.88 $ 6.36 Earnings per share attributable to Quest Diagnostics' common stockholders - diluted: Income from continuing operations $ 1.20 $ 1.51 $ 1.56 $ 1.86 $ 6.13 Income from discontinued operations — 0.15 — — 0.15 Net income $ 1.20 $ 1.66 $ 1.56 $ 1.86 $ 6.28 (a) During the third quarter of 2006, the Company completed the wind down of Nichols Institute Diagnostics ("NID"), a test kit manufacturing subsidiary. As a result, NID was classified as discontinued operations through 2019, at which point certain income tax contingencies related to NID were resolved (see Note 21 to the audited consolidated financial statements). (b) Included pre-tax amortization expense of $28 million ($25 million in amortization of intangible assets and $3 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $16 million ($7 million in cost of services and $9 million in selling, general and administrative expenses), primarily associated with systems conversions and integration incurred in connection with further restructuring and integrating the Company; and pre-tax charges of $9 million ($1 million in cost of services, $3 million in selling, general and administrative expenses and $5 million in other operating expense (income), net), associated with certain costs incurred as a result of the COVID-19 pandemic and resulting impact on the economy including incremental costs incurred primarily to protect the health and safety of the Company's employees and customers and to transition certain employees to a remote work environment, and certain asset impairment charges; partially offset by excess tax benefits associated with stock-based compensation arrangements of $8 million recorded in income tax expense. (c) Included pre-tax amortization expense of $28 million ($25 million in amortization of intangible assets and $3 million in equity in earnings of equity method investees, net of taxes); and pre-tax charges of $9 million ($3 million in cost of services and $6 million in selling, general and administrative expenses), representing costs primarily associated with systems conversions and integration incurred in connection with further restructuring and integrating the Company; partially offset by a pre-tax gain of $26 million (charges of $34 million in cost of services and $5 million in selling, general and administrative expenses, offset by a $62 million gain in other operating expense (income), net, and a $3 million gain in equity in earnings of equity method investees, net of taxes), representing certain items resulting from the COVID-19 pandemic, including expense associated with a payment to eligible employees to help offset expenses they incurred as a result of COVID-19, incremental costs incurred primarily to protect the health and safety of the Company's employees and customers, and certain impairment charges, which were more than offset by $65 million of income recognized attributable to the receipt of the initial tranche of funds from the government that were appropriated to healthcare providers under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"); and excess tax benefits associated with stock-based compensation arrangements of $4 million recorded in income tax expense. (d) Included net pre-tax charges of $69 million (charges of $3 million in cost of services, $65 million in other operating expense (income), net, and $1 million in equity in earnings of equity method investees, net of taxes), representing the impact of certain items resulting from the COVID-19 pandemic, including incremental costs incurred primarily to protect the health and safety of the Company's employees and customers and the reversal of $65 million of income previously recognized during the second quarter of 2020 attributable to the receipt of funds from the government that were appropriated to healthcare providers under the CARES Act; pre-tax amortization expense of $30 million ($27 million in amortization of intangible assets and $3 million in equity in earnings of equity method investees, net of taxes); and pre-tax charges of $18 million ($11 million in cost of services and $7 million in selling, general and administrative expenses), representing costs primarily associated with systems conversions and integration incurred in connection with further restructuring and integrating the Company; partially offset by a pre-tax gain of $70 million recognized in other income (expense), net upon the acquisition of the remaining 56% interest in Mid America Clinical Laboratories, LLC as a result of the remeasurement of the Company's previously held equity interest to fair value; and excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense. (e) Included pre-tax amortization expense of $28 million ($26 million in amortization of intangible assets and $2 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $20 million (charges of $19 million in cost of services, $2 million in selling, general and administrative expenses and $1 million in other operating expense (income), net, partially offset by a $2 million gain in equity in earnings of equity method investees, net of taxes), representing the impact of certain items resulting from the COVID-19 pandemic, principally including expense associated with payments to eligible employees to help offset expenses they incurred as a result of COVID-19 and incremental costs incurred primarily to protect the health and safety of the Company's employees and customers; and pre-tax charges of $15 million ($6 million in cost of services and $9 million in selling, general and administrative expenses), primarily associated with systems conversions and integration incurred in connection with further restructuring and integrating the Company; partially offset by a pre-tax gain of $2 million ($2 million of charges in selling, general and administrative expenses and a $10 million loss in other income (expense), net, offset by a $14 million gain in equity in earnings of equity method investees, net of taxes) related to costs associated with Quest for Health Equity (the Company's recently announced initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities) and a loss on retirement of debt, which were more than offset by a gain recognized by an equity method investee to adjust certain of its investments to fair value; and excess tax benefits associated with stock-based compensation arrangements of $8 million recorded in income tax expense. In the fourth quarter of 2020, the Company returned the funds received from the government that were appropriated to healthcare providers under the CARES Act. (f) The sum of basic and diluted earnings per share attributable to Quest Diagnostics' common stockholders for the four quarters of 2020 did not equal the totals for the year ended December 31, 2020 due to quarterly fluctuations in the Company's earnings and weighted average common shares outstanding throughout the period primarily due to the impact of the COVID-19 pandemic on the Company's results and the temporary suspension of repurchases under the Company's share repurchase program. (g) Included pre-tax amortization expense of $29 million ($24 million in amortization of intangible assets and $5 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $22 million ($11 million in cost of services and $11 million in selling, general and administrative expenses), primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company; a pre-tax gain of $8 million ($1 million charge in selling, general and administrative expenses offset by a $9 million gain in other operating expense (income), net), due to non-cash asset impairment charges, which were more than offset by a gain associated with proceeds from an insurance claim for hurricane related losses; and excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense. (h) Included pre-tax amortization expense of $30 million ($25 million in amortization of intangible assets and $5 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $26 million ($11 million in cost of services and $15 million in selling, general and administrative expenses), primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company; a pre-tax gain of $6 million in other operating expense (income), net, primarily due to a gain associated with the decrease in the fair value of the contingent consideration accrual associated with a previous acquisition; and excess tax benefits associated with stock-based compensation arrangements of $5 million recorded in income tax expense. Income from discontinued operations, net of taxes includes discrete tax benefits of $20 million associated with the favorable resolution of certain tax contingencies related to NID. (i) Included pre-tax amortization expense of $25 million ($23 million in amortization of intangible assets and $2 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $16 million ($7 million in cost of services and $9 million in selling, general and administrative expenses), primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company; a pre-tax gain of $3 million ($4 million charge in selling, general and administrative expenses, offset by a $7 million gain in other operating expense (income), net), consisting of costs incurred related to the AMCA Data Security Incident, which were more than offset by a gain associated with the decrease in the fair value of the contingent consideration accrual associated with a previous acquisition; and excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense. (j) Includes a pre-tax gain of $72 million ($1 million charge in selling, general and administrative expenses, offset by a $73 million gain in other operating expense (income), net), primarily associated with the sale and leaseback of a property; pre-tax amortization expense of $27 million ($24 million in amortization of intangible assets and $3 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $14 million ($6 million in cost of services and $8 million in selling, general and administrative expenses), primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company; and excess tax benefits associated with stock-based compensation arrangements of $2 million recorded in income tax expense. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Equity method investments carrying value | $ 521,000,000 | $ 482,000,000 | $ 521,000,000 | $ 482,000,000 | ||||||||
Percentage of net revenues | 100.00% | 100.00% | 100.00% | |||||||||
Share of equity earnings from investments in affiliates | $ 75,000,000 | $ 57,000,000 | $ 44,000,000 | |||||||||
Percentage of net accounts receivable | 100.00% | 100.00% | 100.00% | 100.00% | ||||||||
Operating income (loss) | $ 1,971,000,000 | $ 1,231,000,000 | 1,101,000,000 | |||||||||
Net income | $ 609,000,000 | $ 591,000,000 | $ 193,000,000 | $ 106,000,000 | $ 265,000,000 | $ 226,000,000 | $ 239,000,000 | $ 176,000,000 | 1,499,000,000 | 906,000,000 | 788,000,000 | |
Trading equity securities gain or (loss) | 8,000,000 | 10,000,000 | (2,000,000) | |||||||||
Impairment charges | 0 | 0 | $ 0 | |||||||||
Equity Securities without readily determinable fair value | 25,000,000 | 25,000,000 | 25,000,000 | 25,000,000 | ||||||||
Available-for-sale debt securities | 12,000,000 | 12,000,000 | 12,000,000 | 12,000,000 | ||||||||
Operating lease right-of-use assets | 604,000,000 | 518,000,000 | 604,000,000 | 518,000,000 | ||||||||
Operating lease, liability | 640,000,000 | 640,000,000 | ||||||||||
Deferred rent adjustments | $ 50,000,000 | |||||||||||
Cumulative Effect, Period of Adoption, Adjustment | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Operating lease right-of-use assets | 500,000,000 | |||||||||||
Operating lease, liability | $ 550,000,000 | |||||||||||
Other Assets | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Trading securities, equity | $ 67,000,000 | $ 59,000,000 | $ 67,000,000 | $ 59,000,000 | ||||||||
DIS business | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Percentage of net revenues | 97.00% | 96.00% | 96.00% | |||||||||
Percentage of net accounts receivable | 97.00% | 95.00% | 97.00% | 95.00% | ||||||||
Operating income (loss) | $ 2,201,000,000 | $ 1,298,000,000 | $ 1,235,000,000 | |||||||||
DIS business | Government payers | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Percentage of net revenues | 11.00% | 15.00% | 16.00% | |||||||||
Percentage of net accounts receivable | 6.00% | 11.00% | 6.00% | 11.00% | ||||||||
DIS business | Patients | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Percentage of net revenues | 11.00% | 13.00% | 13.00% | |||||||||
Percentage of net accounts receivable | 11.00% | 20.00% | 11.00% | 20.00% | ||||||||
Percentage of receivables due from patients | 11.00% | 20.00% | 11.00% | 20.00% | ||||||||
Minimum | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 20.00% | 20.00% | ||||||||||
Finite-lived intangible asset, useful life | 5 years | |||||||||||
Minimum | Laboratory Equipment and Furniture and Fixtures | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Property, plant and equipment, useful life | 5 years | |||||||||||
Minimum | Software and Software Development Costs | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Property, plant and equipment, useful life | 5 years | |||||||||||
Minimum | DIS business | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Percentage of net revenues | 95.00% | 95.00% | 95.00% | |||||||||
Maximum | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Equity method investment, ownership percentage | 49.00% | 49.00% | ||||||||||
Finite-lived intangible asset, useful life | 20 years | |||||||||||
Maximum | Building and Building Improvements | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Property, plant and equipment, useful life | 31 years 6 months | |||||||||||
Maximum | Laboratory Equipment and Furniture and Fixtures | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Property, plant and equipment, useful life | 12 years | |||||||||||
Maximum | Software and Software Development Costs | ||||||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||||||
Property, plant and equipment, useful life | 10 years |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 100.00% | 100.00% | 100.00% |
Percentage of net accounts receivable | 100.00% | 100.00% | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance, January 1, 2020 | $ 15 | ||
Provision for credit losses | 19 | ||
Write-offs of accounts receivable, net of recoveries | (6) | ||
Balance, December 31, 2020 | $ 28 | $ 15 | |
Healthcare insurers: | Minimum | |||
Segment Reporting Information [Line Items] | |||
Collection of consideration | 30 days | ||
Healthcare insurers: | Maximum | |||
Segment Reporting Information [Line Items] | |||
Collection of consideration | 60 days | ||
Government payers | |||
Segment Reporting Information [Line Items] | |||
Collection of consideration | 30 days | ||
Client payers | Minimum | |||
Segment Reporting Information [Line Items] | |||
Collection of consideration | 60 days | ||
Client payers | Maximum | |||
Segment Reporting Information [Line Items] | |||
Collection of consideration | 90 days | ||
Patients | Minimum | |||
Segment Reporting Information [Line Items] | |||
Collection of consideration | 30 days | ||
Patients | Maximum | |||
Segment Reporting Information [Line Items] | |||
Collection of consideration | 60 days | ||
DS | Minimum | |||
Segment Reporting Information [Line Items] | |||
Collection of consideration | 30 days | ||
DS | Maximum | |||
Segment Reporting Information [Line Items] | |||
Collection of consideration | 60 days | ||
DIS business | |||
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 97.00% | 96.00% | 96.00% |
Percentage of net accounts receivable | 97.00% | 95.00% | |
DIS business | Minimum | |||
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 95.00% | 95.00% | 95.00% |
DIS business | Healthcare insurers: | |||
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 37.00% | 36.00% | 35.00% |
Percentage of net accounts receivable | 34.00% | 22.00% | |
DIS business | Healthcare insurers: | Fee-for-service | |||
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 34.00% | 33.00% | 32.00% |
DIS business | Healthcare insurers: | Capitated | |||
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 3.00% | 3.00% | 3.00% |
DIS business | Government payers | |||
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 11.00% | 15.00% | 16.00% |
Percentage of net accounts receivable | 6.00% | 11.00% | |
DIS business | Client payers | |||
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 38.00% | 32.00% | 32.00% |
Percentage of net accounts receivable | 46.00% | 42.00% | |
DIS business | Patients | |||
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 11.00% | 13.00% | 13.00% |
Period of billing fully reserve | 210 days | ||
Percentage of net accounts receivable | 11.00% | 20.00% | |
All other operating segments | DS | |||
Segment Reporting Information [Line Items] | |||
Percentage of net revenues | 3.00% | 4.00% | 4.00% |
Percentage of net accounts receivable | 3.00% | 5.00% |
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, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |||||||||||
Income from continuing operations | $ 1,431 | $ 838 | $ 736 | ||||||||
Income from discontinued operations, net of taxes | 0 | 20 | 0 | ||||||||
Net income attributable to Quest Diagnostics | $ 579 | $ 568 | $ 185 | $ 99 | $ 253 | $ 215 | $ 226 | $ 164 | 1,431 | 858 | 736 |
Less: Earnings allocated to participating securities | 6 | 3 | 3 | ||||||||
Earnings available to Quest Diagnostics’ common stockholders – basic and diluted | $ 1,425 | $ 835 | $ 733 | ||||||||
Weighted average common shares outstanding - basic | 134 | 134 | 136 | ||||||||
Stock options and performance share units | 2 | 2 | 3 | ||||||||
Weighted average common shares outstanding - diluted | 136 | 136 | 139 | ||||||||
Income from continuing operations (in dollars per share) | $ 4.28 | $ 4.20 | $ 1.38 | $ 0.74 | $ 1.88 | $ 1.59 | $ 1.52 | $ 1.22 | $ 10.62 | $ 6.21 | $ 5.39 |
Income from discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0 | 0 | 0.15 | 0 | 0 | 0.15 | 0 |
Net income (in dollars per share) | 4.28 | 4.20 | 1.38 | 0.74 | 1.88 | 1.59 | 1.67 | 1.22 | 10.62 | 6.36 | 5.39 |
Income from continuing operations (in dollars per share) | 4.21 | 4.14 | 1.36 | 0.73 | 1.86 | 1.56 | 1.51 | 1.20 | 10.47 | 6.13 | 5.29 |
Income from discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0 | 0 | 0.15 | 0 | 0 | 0.15 | 0 |
Net income (in dollars per share) | $ 4.21 | $ 4.14 | $ 1.36 | $ 0.73 | $ 1.86 | $ 1.56 | $ 1.66 | $ 1.20 | $ 10.47 | $ 6.28 | $ 5.29 |
Stock options and performance share units not included due to their antidilutive effect | 1 | 3 | 2 |
RESTRUCTURING ACTIVITIES (Narra
RESTRUCTURING ACTIVITIES (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Income statement (income) expense | $ 14 | $ (3) | |
Invigorate Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Income statement (income) expense | 14 | (2) | $ 51 |
Invigorate Program | Cost of Sales | |||
Restructuring Cost and Reserve [Line Items] | |||
Income statement (income) expense | 9 | 22 | |
Invigorate Program | Selling, General and Administrative Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Income statement (income) expense | $ 5 | $ (2) | $ 29 |
RESTRUCTURING ACTIVITIES (Pre-T
RESTRUCTURING ACTIVITIES (Pre-Tax Restructuring charges) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Total restructuring charges | $ 14 | $ (3) | |
Invigorate Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Employee separation costs | 14 | (3) | $ 45 |
Facility-related costs | 0 | 1 | 4 |
Asset impairment charges | 0 | 0 | 2 |
Total restructuring charges | $ 14 | $ (2) | $ 51 |
RESTRUCTURING ACTIVITIES (Activ
RESTRUCTURING ACTIVITIES (Activities of Restructuring Liabilities) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Restructuring Reserve [Roll Forward] | ||
Beginning balance | $ 9 | $ 38 |
Income statement (income) expense | 14 | (3) |
Cash payments | (16) | (25) |
Other | (1) | |
Ending balance | 7 | 9 |
Employee Separation Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 9 | 37 |
Income statement (income) expense | 14 | (3) |
Cash payments | (16) | (25) |
Other | 0 | |
Ending balance | 7 | 9 |
Facility-Related Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 0 | 1 |
Income statement (income) expense | 0 | 0 |
Cash payments | 0 | 0 |
Other | (1) | |
Ending balance | $ 0 | $ 0 |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) - USD ($) | Aug. 01, 2020 | Jul. 31, 2020 | Apr. 06, 2020 | Jan. 21, 2020 | Feb. 11, 2019 | Nov. 06, 2018 | Sep. 19, 2018 | Jun. 18, 2018 | Feb. 01, 2018 | Sep. 30, 2019 | Sep. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||||||||||||
Total consideration | $ 330,000,000 | $ 63,000,000 | $ 440,000,000 | ||||||||||||
Goodwill acquired during the year | 247,000,000 | 43,000,000 | |||||||||||||
Goodwill deductible for tax purposes | 210,000,000 | 36,000,000 | 205,000,000 | ||||||||||||
Finite-lived intangibles | 146,000,000 | 21,000,000 | 167,000,000 | ||||||||||||
Revenues | 127,000,000 | 84,000,000 | |||||||||||||
Cash acquired from acquisition | 21,000,000 | 0 | 6,000,000 | ||||||||||||
Deferred tax liabilities | 11,000,000 | ||||||||||||||
Goodwill | 6,873,000,000 | 6,619,000,000 | 6,563,000,000 | ||||||||||||
Cash consideration | 351,000,000 | 58,000,000 | 427,000,000 | ||||||||||||
Contingent consideration | $ 0 | ||||||||||||||
Goodwill adjustment | 241,000,000 | ||||||||||||||
Other Operating Income (Expense) | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration arrangements | $ (6,000,000) | ||||||||||||||
Technology-Based Intangible Assets | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible asset, useful life | 15 years | ||||||||||||||
Customer Relationships | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible asset, useful life | 17 years | ||||||||||||||
Blueprint Genetics Oy | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total consideration | $ 108,000,000 | ||||||||||||||
Goodwill deductible for tax purposes | 66,000,000 | ||||||||||||||
Cash acquired from acquisition | 3,000,000 | ||||||||||||||
Goodwill | 66,000,000 | ||||||||||||||
Finite-lived intangibles | 43,000,000 | ||||||||||||||
Property, plant, and equipment and working capital | $ 2,000,000 | ||||||||||||||
Blueprint Genetics Oy | Technology-Based Intangible Assets | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible asset, useful life | 10 years | ||||||||||||||
Blueprint Genetics Oy | Customer Relationships | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible asset, useful life | 15 years | ||||||||||||||
Memorial Hermann | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total consideration | $ 120,000,000 | ||||||||||||||
Goodwill deductible for tax purposes | 93,000,000 | ||||||||||||||
Goodwill | 93,000,000 | ||||||||||||||
Memorial Hermann | Customer Relationships | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangibles | $ 27,000,000 | ||||||||||||||
Finite-lived intangible asset, useful life | 15 years | ||||||||||||||
Mid America Clinical Laboratories, LLC (MACL) | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total consideration | $ 93,000,000 | ||||||||||||||
Goodwill deductible for tax purposes | 47,000,000 | ||||||||||||||
Cash acquired from acquisition | 18,000,000 | ||||||||||||||
Goodwill | 84,000,000 | ||||||||||||||
Finite-lived intangibles | $ 74,000,000 | ||||||||||||||
Percentage of voting interests acquired | 56.00% | 56.00% | |||||||||||||
Equity interest in acquiree, percentage | 44.00% | ||||||||||||||
Equity interest in acquiree, fair value | $ 87,000,000 | ||||||||||||||
Equity interest in acquiree, remeasurement gain | $ 70,000,000 | ||||||||||||||
Equity interest in acquiree, long-term growth rate used to determine fair value | 1.50% | ||||||||||||||
Equity interest in acquiree, discount rate used to determine fair value | 7.50% | ||||||||||||||
Working capital | $ 11,000,000 | ||||||||||||||
Property, plant and equipment, net | 11,000,000 | ||||||||||||||
Mid America Clinical Laboratories, LLC (MACL) | Other Income (Expense) | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Equity interest in acquiree, remeasurement gain | $ 70,000,000 | ||||||||||||||
Mid America Clinical Laboratories, LLC (MACL) | Customer Relationships | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible asset, useful life | 15 years | ||||||||||||||
Boyce & Bynum Pathology Laboratories, P.C. (Boyce & Bynum) | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total consideration | $ 61,000,000 | ||||||||||||||
Goodwill deductible for tax purposes | 35,000,000 | ||||||||||||||
Goodwill | 41,000,000 | ||||||||||||||
Cash consideration | 55,000,000 | ||||||||||||||
Boyce & Bynum Pathology Laboratories, P.C. (Boyce & Bynum) | Level 3 | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration | 6,000,000 | 0 | |||||||||||||
Boyce & Bynum Pathology Laboratories, P.C. (Boyce & Bynum) | Other Operating Income (Expense) | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration arrangements | 6,000,000 | ||||||||||||||
Boyce & Bynum Pathology Laboratories, P.C. (Boyce & Bynum) | Customer Relationships | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangibles | $ 20,000,000 | ||||||||||||||
Finite-lived intangible asset, useful life | 15 years | ||||||||||||||
Mobile Medical Examination Services, Inc. (MedXM) | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total consideration | $ 142,000,000 | ||||||||||||||
Goodwill deductible for tax purposes | 45,000,000 | ||||||||||||||
Cash acquired from acquisition | 5,000,000 | ||||||||||||||
Goodwill | 57,000,000 | ||||||||||||||
Finite-lived intangibles | 77,000,000 | ||||||||||||||
Working capital | 7,000,000 | ||||||||||||||
Property, plant and equipment, net | 1,000,000 | ||||||||||||||
Cash consideration | 130,000,000 | ||||||||||||||
Mobile Medical Examination Services, Inc. (MedXM) | Level 3 | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration | $ 12,000,000 | 0 | |||||||||||||
Mobile Medical Examination Services, Inc. (MedXM) | Other Operating Income (Expense) | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration arrangements | $ 12,000,000 | ||||||||||||||
Mobile Medical Examination Services, Inc. (MedXM) | Customer Relationships | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible asset, useful life | 15 years | ||||||||||||||
Cape Cod Healthcare, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total consideration | $ 35,000,000 | ||||||||||||||
ReproSource, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total consideration | $ 35,000,000 | ||||||||||||||
Cash consideration | 30,000,000 | ||||||||||||||
ReproSource, Inc. | Level 3 | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Contingent consideration | $ 5,000,000 | $ 0 | |||||||||||||
Oxford Immunotec, Inc. | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Total consideration | $ 170,000,000 | ||||||||||||||
Goodwill deductible for tax purposes | 112,000,000 | ||||||||||||||
Cash acquired from acquisition | 1,000,000 | ||||||||||||||
Goodwill | 112,000,000 | ||||||||||||||
Finite-lived intangibles | 43,000,000 | ||||||||||||||
Working capital | 13,000,000 | ||||||||||||||
Property, plant and equipment, net | $ 6,000,000 | ||||||||||||||
Adjustment, goodwill | $ 13,000,000 | ||||||||||||||
Adjustment, intangibles | (11,000,000) | ||||||||||||||
Adjustment, other assets and liabilities | $ 2,000,000 | ||||||||||||||
Oxford Immunotec, Inc. | Customer Relationships | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible asset, useful life | 15 years | ||||||||||||||
Oxford Immunotec, Inc. | Contract Related | |||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||
Finite-lived intangible asset, useful life | 5 years |
FAIR VALUE MEASUREMENTS (Recogn
FAIR VALUE MEASUREMENTS (Recognized Assets and Liabilities at Fair Value) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-sale debt securities | $ 12,000,000 | $ 12,000,000 |
Contingent consideration | 0 | |
Recurring Basis | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 67,000,000 | 59,000,000 |
Cash surrender value of life insurance policies | 50,000,000 | 43,000,000 |
Available-for-sale debt securities | 12,000,000 | 12,000,000 |
Total assets | 129,000,000 | 114,000,000 |
Deferred compensation liabilities | 126,000,000 | 110,000,000 |
Contingent consideration | 7,000,000 | |
Total liabilities | 145,000,000 | |
Redeemable noncontrolling interest | 82,000,000 | 76,000,000 |
Recurring Basis | Interest Rate Swap | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fix-to-variable interest rate swaps | 28,000,000 | |
Recurring Basis | Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 67,000,000 | 59,000,000 |
Cash surrender value of life insurance policies | 0 | 0 |
Available-for-sale debt securities | 0 | 0 |
Total assets | 67,000,000 | 59,000,000 |
Deferred compensation liabilities | 0 | 0 |
Contingent consideration | 0 | |
Total liabilities | 0 | |
Redeemable noncontrolling interest | 0 | 0 |
Recurring Basis | Level 1 | Interest Rate Swap | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fix-to-variable interest rate swaps | 0 | |
Recurring Basis | Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 0 | 0 |
Cash surrender value of life insurance policies | 50,000,000 | 43,000,000 |
Available-for-sale debt securities | 0 | 0 |
Total assets | 50,000,000 | 43,000,000 |
Deferred compensation liabilities | 126,000,000 | 110,000,000 |
Contingent consideration | 0 | |
Total liabilities | 138,000,000 | |
Recurring Basis | Level 2 | Interest Rate Swap | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fix-to-variable interest rate swaps | 28,000,000 | |
Recurring Basis | Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Trading securities | 0 | 0 |
Cash surrender value of life insurance policies | 0 | 0 |
Available-for-sale debt securities | 12,000,000 | 12,000,000 |
Total assets | 12,000,000 | 12,000,000 |
Deferred compensation liabilities | 0 | 0 |
Contingent consideration | 7,000,000 | |
Total liabilities | 7,000,000 | |
Redeemable noncontrolling interest | $ 82,000,000 | 76,000,000 |
Recurring Basis | Level 3 | Interest Rate Swap | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fix-to-variable interest rate swaps | $ 0 |
FAIR VALUE MEASUREMENTS (Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jul. 01, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Contingent consideration, liability | $ 0 | ||
Fair value of debt | 4,600,000,000 | $ 5,100,000,000 | |
UMass Joint Venture | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Ownership percentage by noncontrolling owners | 18.90% | ||
Level 3 | Contingent Consideration | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total (gains)/losses included in earnings - realized/unrealized | 1,000,000 | 12,000,000 | |
Level 3 | Contingent Consideration | Other Operating Income (Expense) | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total (gains)/losses included in earnings - realized/unrealized | $ 1,000,000 | $ 12,000,000 |
FAIR VALUE MEASUREMENTS (Reconc
FAIR VALUE MEASUREMENTS (Reconciliation of Beginning and Ending Balances of Liabilities Unobservable Inputs) (Details) - Level 3 - Contingent Consideration - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 7 | $ 14 |
Purchases, additions and issuances | 6 | |
Settlements | (6) | (1) |
Total (gains)/losses included in earnings - realized/unrealized | (1) | (12) |
Ending Balance | $ 0 | $ 7 |
TAXES ON INCOME (Details)
TAXES ON INCOME (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Contingency [Line Items] | |||
Income (loss) from continuing operations - domestic | $ 1,900 | $ 1,100 | $ 900 |
Income (loss) from continuing operations - foreign | (7) | 15 | (1) |
Deferred income tax expense (benefit) | 85 | 15 | 73 |
Current federal tax expense (benefit) | 300 | 176 | 82 |
Current state and local income tax expense | 74 | 53 | 26 |
Current foreign income tax expense | 1 | 3 | 1 |
Defered federal income tax expense (benefit) | 55 | 21 | 66 |
Deferred state and local income tax expense (benefit) | 29 | (4) | 10 |
Deferred foreign income tax expense (benefit) | 1 | (2) | (3) |
Total | $ (460) | $ (247) | $ (182) |
Tax provision at statutory rate | 21.00% | 21.00% | 21.00% |
State and local income taxes, net of federal benefit | 4.50% | 4.60% | 4.70% |
Impact of noncontrolling interests | (0.90%) | (1.10%) | (1.40%) |
Excess tax benefits on stock-based compensation arrangements | (1.20%) | (1.20%) | (1.90%) |
Return to provision true-ups | (0.70%) | (1.40%) | (1.40%) |
Change in accounting method | 0.00% | 0.00% | (1.60%) |
Impact of equity earnings | 0.80% | 1.10% | 1.00% |
Changes in reserves for uncertain tax positions | 0.90% | 1.70% | (0.80%) |
Change in valuation allowances associated with certain net operating losses | 0.20% | (1.10%) | 0.00% |
Other, net | (0.10%) | (0.60%) | 0.10% |
Effective tax rate | 24.50% | 23.00% | 19.70% |
Income tax benefit associated with changes in tax return accounting method | $ 15 | ||
Accounts receivable reserves | $ 71 | $ 64 | |
Liabilities not currently deductible | 146 | 126 | |
Stock-based compensation | 47 | 35 | |
Basis differences in investments, joint ventures and subsidiaries | (81) | (80) | |
Net operating loss carryfowards, net of valuation allowance | 61 | 75 | |
Operating lease right-of-use assets | (151) | (129) | |
Operating lease liabilities | 161 | 139 | |
Non-current deferred tax liability - depreciation and amortization | (604) | (494) | |
Total non-current deferred tax liabilities | (350) | (264) | |
Operating loss carryforwards | 94 | 101 | |
Deferred tax assets, valuation allowance | 33 | 26 | |
Income tax benefit due to release of valuation allowances associated with net operating loss carryforwards | (12) | ||
Income taxes payable | 135 | 113 | |
Prepaid taxes | 2 | 3 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning balance | 88 | 107 | 115 |
Additions for tax positions of current year | 2 | 2 | 2 |
Additions for tax positions of prior years | 25 | 16 | 11 |
Reductions for changes in judgment | (9) | (3) | (6) |
Reductions for expirations of statutes of limitations | (4) | (2) | (15) |
Reductions for settlements | (9) | (32) | 0 |
Unrecognized tax benefits, ending balance | 93 | 88 | 107 |
Unrecognized tax benefits that would impact effective tax rate | 75 | ||
Significant change in unrecognized tax benefits is reasonably possible, estimated range of change, upper bound | 15 | ||
Unrecognized tax Benefits, interest on income taxes expense | 6 | 5 | $ 1 |
Unrecognized tax benefits, interest on income taxes accrued | 21 | $ 17 | |
Domestic Country | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | 60 | ||
State and Local Jurisdiction | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | 1,000 | ||
Foreign Country | |||
Income Tax Contingency [Line Items] | |||
Net operating loss carryforwards | $ 76 |
SUPPLEMENTAL CASH FLOW AND OT_3
SUPPLEMENTAL CASH FLOW AND OTHER DATA (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow and Other Data [Line Items] | |||||||||||
Amortization expense | $ 26 | $ 27 | $ 25 | $ 25 | $ 24 | $ 23 | $ 25 | $ 24 | $ 103 | $ 96 | $ 90 |
Depreciation expense | 258 | 233 | 219 | ||||||||
Depreciation and amortization expense | 361 | 329 | 309 | ||||||||
Interest expense | (166) | (180) | (169) | ||||||||
Interest income | 3 | 5 | 2 | ||||||||
Interest expense, net | (163) | (175) | (167) | ||||||||
Interest paid | 201 | 192 | 174 | ||||||||
Income taxes paid | 360 | 202 | 84 | ||||||||
Accounts payable associated with capital expenditures | 46 | 26 | 11 | ||||||||
Accounts payable associated with purchases of treasury stock | 0 | 0 | 0 | 0 | 3 | ||||||
Dividend payable | 76 | 71 | 76 | 71 | 71 | ||||||
Fair value of assets acquired | 368 | 63 | 453 | ||||||||
Fair value of liabilities assumed | 17 | 0 | 7 | ||||||||
Fair value of net assets acquired | 351 | 63 | 446 | ||||||||
Merger consideration payable | 0 | (5) | (19) | ||||||||
Cash paid for business acquisitions | 351 | 58 | 427 | ||||||||
Less: cash acquired | 21 | 0 | 6 | ||||||||
Business acquisitions, net of cash acquired | 330 | 58 | 421 | ||||||||
Leases: | |||||||||||
Operating cash flows from operating leases | 185 | 180 | |||||||||
Operating cash flows from finance leases | 3 | 3 | |||||||||
Financing cash flows from finance leases | 3 | 4 | |||||||||
Leased assets obtained in exchange for new operating lease liabilities | 219 | 164 | |||||||||
Leased assets obtained in exchange for new finance lease liabilities | $ 0 | $ 1 | |||||||||
Leased assets obtained in exchange for new finance lease liabilities | $ 1 | ||||||||||
Intangible Assets | |||||||||||
Supplemental Cash Flow and Other Data [Line Items] | |||||||||||
Amortization expense | $ 28 | $ 30 | $ 28 | $ 28 | $ 27 | $ 25 | $ 30 | $ 29 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 4,229 | $ 4,229 | $ 4,619 |
Less: accumulated depreciation and amortization | (2,776) | (2,776) | (2,992) |
Property, plant and equipment, net | 1,453 | 1,453 | 1,627 |
Gain on sale recognized | (72) | ||
Other Operating Income (Expense) | |||
Property, Plant and Equipment [Line Items] | |||
Gain on sale recognized | (73) | 73 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 25 | 25 | 42 |
Building and Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 341 | 341 | 526 |
Laboratory Equipment, Furniture and Fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,788 | 1,788 | 1,974 |
Leasehold Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 639 | 639 | 666 |
Computer Software Developed or Obtained for Internal Use | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1,106 | 1,106 | 1,209 |
Construction in Progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 330 | $ 330 | $ 202 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||
Goodwill, balance at beginning of year | $ 6,619 | $ 6,563 |
Goodwill acquired during the year | 247 | 43 |
Adjustments to goodwill | 7 | 13 |
Goodwill, balance at end of year | 6,873 | 6,619 |
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, gross excluding goodwill | 1,967 | 1,820 |
Accumulated amortization, intangible assets | (800) | (699) |
Total intangible assets, net | 1,167 | 1,121 |
Future amortization expense | ||
2021 | 101 | |
2022 | 98 | |
2023 | 96 | |
2024 | 93 | |
2025 | 92 | |
Thereafter | 451 | |
Total | 931 | |
Intangible Assets Not Subject to Amortization - Tradenames | ||
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 | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Intangible assets, gross excluding goodwill | 1 | 1 |
Total intangible assets, net | $ 1 | 1 |
Customer Relationships | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 17 years | |
Intangible assets, gross excluding goodwill | $ 1,479 | 1,367 |
Accumulated amortization, intangible assets | (638) | (556) |
Total intangible assets, net | $ 841 | 811 |
Non-compete Agreements | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 9 years | |
Intangible assets, gross excluding goodwill | $ 3 | 3 |
Accumulated amortization, intangible assets | (2) | (2) |
Total intangible assets, net | $ 1 | 1 |
Technology | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 15 years | |
Intangible assets, gross excluding goodwill | $ 141 | 104 |
Accumulated amortization, intangible assets | (65) | (56) |
Total intangible assets, net | $ 76 | 48 |
Other Intangible Assets, Subject To Amortization | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 9 years | |
Intangible assets, gross excluding goodwill | $ 108 | 110 |
Accumulated amortization, intangible assets | (95) | (85) |
Total intangible assets, net | $ 13 | 25 |
Total Amortizing Intangible Assets | ||
Finite-Lived and Indefinite-lived Intangible Assets [Line Items] | ||
Weighted average amortization period | 17 years | |
Intangible assets, gross excluding goodwill | $ 1,731 | 1,584 |
Accumulated amortization, intangible assets | (800) | (699) |
Total intangible assets, net | $ 931 | $ 885 |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accrued wages and benefits (including incentive compensation) | $ 502 | $ 287 |
Trade accounts payable | 446 | 263 |
Accrued expenses | 356 | 223 |
Overdrafts | 153 | 88 |
Dividend payable | 76 | 71 |
Income taxes payable | 43 | 27 |
Accrued insurance | 31 | 30 |
Accrued interest | 26 | 45 |
Merger consideration payable | 0 | 7 |
Total | $ 1,633 | $ 1,041 |
DEBT (Long-Term Debt) (Details)
DEBT (Long-Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | May 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 4,015 | $ 4,770 | ||
Debt issuance costs | (28) | (26) | ||
Less: current portion of long-term debt | 2 | 804 | ||
Total long-term debt, net of current portion | 4,013 | 3,966 | ||
Other | ||||
Debt Instrument [Line Items] | ||||
Other | 27 | 34 | ||
Senior Notes | 4.75% Senior Notes due January 2020 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 0 | 500 | ||
Debt instrument, interest rate | 4.75% | |||
Senior Notes | 2.50% Senior Notes due March 2020 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 0 | 300 | ||
Debt instrument, interest rate | 2.50% | |||
Senior Notes | 4.70% Senior Notes due April 2021 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 0 | 554 | ||
Debt instrument, interest rate | 4.70% | |||
Senior Notes | 4.25% Senior Notes due April 2024 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 316 | 308 | ||
Debt instrument, interest rate | 4.25% | |||
Senior Notes | 3.50% Senior Notes due March 2025 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 622 | 593 | ||
Debt instrument, interest rate | 3.50% | |||
Senior Notes | 3.45% Senior Notes due June 2026 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 512 | 490 | ||
Debt instrument, interest rate | 3.45% | |||
Senior Notes | 4.20% Senior Notes due June 2029 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 499 | 499 | ||
Debt instrument, interest rate | 4.20% | 4.20% | ||
Senior Notes | 2.95% Senior Notes due June 2030 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 798 | $ 798 | ||
Debt instrument, interest rate | 2.95% | 2.95% | ||
Senior Notes | 2.80% Senior Notes due June 2031 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 549 | $ 0 | ||
Debt instrument, interest rate | 2.80% | 2.80% | ||
Senior Notes | 6.95% Senior Notes due July 2037 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 175 | 175 | ||
Debt instrument, interest rate | 6.95% | |||
Senior Notes | 5.75% Senior Notes due January 2040 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 245 | 245 | ||
Debt instrument, interest rate | 5.75% | |||
Senior Notes | 4.70% Senior Notes due March 2045 | ||||
Debt Instrument [Line Items] | ||||
Total long-term debt | $ 300 | $ 300 | ||
Debt instrument, interest rate | 4.70% |
DEBT (Secured Receivables Credi
DEBT (Secured Receivables Credit Facility) (Narrative) (Details) - Secured Receivables Credit Facility - USD ($) | Dec. 31, 2020 | Oct. 31, 2020 | Oct. 22, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||||
Credit facility capacity | $ 600,000,000 | |||
Extension period | 1 year | |||
Commercial Rates for Highly-Rated Issuers or London Interbank Offered Rate (LIBOR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Interest rate in excess of LIBOR | 0.825% | |||
Commercial Rates for Highly-Rated Issuers or London Interbank Offered Rate (LIBOR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Interest rate in excess of LIBOR | 0.95% | |||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility capacity | 100,000,000 | |||
Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding | $ 0 | $ 0 | ||
Loan commitment maturing October 2021 | ||||
Debt Instrument [Line Items] | ||||
Credit facility capacity | 250,000,000 | |||
Loan commitment maturing October 2022 | ||||
Debt Instrument [Line Items] | ||||
Credit facility capacity | $ 250,000,000 |
DEBT (Senior Unsecured Revolvin
DEBT (Senior Unsecured Revolving Credit Facility) (Narrative) (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Oct. 22, 2020 | |
Debt Instrument [Line Items] | ||||||
Remaining borrowing capacity | $ 1,300,000,000 | |||||
Senior unsecured revolving credit facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility capacity | 750,000,000 | |||||
Amount outstanding | 0 | $ 0 | ||||
Remaining borrowing capacity | $ 750,000,000 | |||||
Senior unsecured revolving credit facility [Member] | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Leverage ratio requirement | 650.00% | |||||
Senior unsecured revolving credit facility [Member] | Maximum | Forecast | ||||||
Debt Instrument [Line Items] | ||||||
Leverage ratio requirement | 350.00% | 450.00% | 625.00% | |||
Senior unsecured revolving credit facility [Member] | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Interest rate in excess of LIBOR | 1.125% | 1.125% | ||||
Senior unsecured revolving credit facility [Member] | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility capacity | $ 150,000,000 | |||||
Secured Receivables Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility capacity | $ 600,000,000 | |||||
Remaining borrowing capacity | $ 530,000,000 | |||||
Secured Receivables Credit Facility | Letter of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Credit facility capacity | $ 100,000,000 |
DEBT (Senior Notes Offering) (D
DEBT (Senior Notes Offering) (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | May 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | |
Debt Instrument [Line Items] | ||||
Unamortized discount | $ 11,000,000 | |||
Other Income (Expense) | ||||
Debt Instrument [Line Items] | ||||
Losses on extinguishment of debt | $ 9,000,000 | |||
Senior Notes | 2.80% Senior Notes due June 2031 | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt | $ 550,000,000 | |||
Debt instrument, interest rate | 2.80% | 2.80% | ||
Unamortized discount | $ 1,000,000 | |||
Debt issuance costs | $ 5,000,000 | |||
Senior Notes | 2.95% Senior Notes due June 2030 | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt | $ 800,000,000 | |||
Debt instrument, interest rate | 2.95% | 2.95% | ||
Unamortized discount | $ 2,000,000 | |||
Debt issuance costs | $ 7,000,000 | |||
Senior Notes | 4.20% Senior Notes due June 2029 | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt | $ 500,000,000 | |||
Debt instrument, interest rate | 4.20% | 4.20% | ||
Unamortized discount | $ 1,000,000 | |||
Debt issuance costs | $ 5,000,000 |
DEBT (Maturities of Long-Term D
DEBT (Maturities of Long-Term Debt) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instruments [Abstract] | ||
2021 | $ 2 | |
2022 | 1 | |
2023 | 1 | |
2024 | 302 | |
2025 | 602 | |
Thereafter | 3,095 | |
Total maturities of long-term debt | 4,003 | |
Unamortized discount | (11) | |
Debt issuance costs | (28) | $ (26) |
Fair value basis adjustments attributable to hedged debt | 51 | |
Total long-term debt | 4,015 | 4,770 |
Less: Current portion of long-term debt | 2 | 804 |
Total long-term debt, net of current portion | $ 4,013 | $ 3,966 |
LEASES (Narrative) (Details)
LEASES (Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2018 | |
Leases [Abstract] | ||
Operating leases, rent expense | $ 220 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 16 years | |
Renewal term | 15 years |
LEASES (Liabilities) (Details)
LEASES (Liabilities) (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease assets | $ 604 | $ 518 |
Finance lease assets | 22 | 35 |
Total lease assets | 626 | 553 |
Current operating lease liabilities | 141 | 145 |
Current finance lease liabilities | 2 | 3 |
Noncurrent operating lease liabilities | 499 | 413 |
Noncurrent finance lease liabilities | 25 | 30 |
Total lease liabilities | 667 | 591 |
Right-of-use asset, accumulated amortization | $ 14 | $ 24 |
LEASES (Costs) (Details)
LEASES (Costs) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Operating lease cost | $ 300 | $ 294 |
Leases: | ||
Amortization of leased assets | 6 | 7 |
Interest on lease liabilities | 3 | 3 |
Net lease cost | 309 | 304 |
Short-term leases and variable lease costs | $ 120 | $ 120 |
LEASES (Maturity) (Details)
LEASES (Maturity) (Details) $ in Millions | Dec. 31, 2020USD ($) |
Operating leases | |
2021 | $ 160 |
2022 | 140 |
2023 | 122 |
2024 | 87 |
2025 | 57 |
Thereafter | 153 |
Total lease payments | 719 |
Less: Interest | 79 |
Present value of lease liabilities | 640 |
Finance leases | |
2021 | 4 |
2022 | 3 |
2023 | 3 |
2024 | 3 |
2025 | 3 |
Thereafter | 28 |
Total lease payments | 44 |
Less: Interest | 17 |
Present value of lease liabilities | 27 |
Total | |
2021 | 164 |
2022 | 143 |
2023 | 125 |
2024 | 90 |
2025 | 60 |
Thereafter | 181 |
Total lease payments | 763 |
Less: Interest | 96 |
Present value of lease liabilities | $ 667 |
LEASES (Term and Rate) (Details
LEASES (Term and Rate) (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Weighted-average remaining lease term, Operating leases | 6 years | 5 years |
Weighted-average remaining lease term,Finance leases | 13 years | 12 years |
Weighted-average discount rate, Operating leases | 3.20% | 3.40% |
Weighted-average discount rate, Finance leases | 8.10% | 8.70% |
FINANCIAL INSTRUMENTS (Narrativ
FINANCIAL INSTRUMENTS (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Apr. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2020 | May 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Derivative [Line Items] | ||||||
Amortization period | 10 years | |||||
Gain (loss) on derivatives | $ 1,000,000 | |||||
Accumulated net loss from designated or qualifying cash flow hedges | $ (21,000,000) | $ (39,000,000) | ||||
Net amount of deferred gains and losses on cash flow hedges that is expected to be reclassified within the next 12 months | 1,000,000 | |||||
Forward Starting Interest Rate Swaps | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 25,000,000 | |||||
Interest Rate Lock Agreements | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 275,000,000 | |||||
Fixed-to-variable interest rate swap | ||||||
Derivative [Line Items] | ||||||
Notional amount | 1,200,000,000 | |||||
Proceeds from Termination of Derivative Instrument, Operating Activities | $ 40,000,000 | |||||
Cash Flow Hedging | ||||||
Derivative [Line Items] | ||||||
Accumulated net loss from designated or qualifying cash flow hedges | $ 1,000,000 | 4,000,000 | ||||
Fair Value Hedging | Long-term Debt | ||||||
Derivative [Line Items] | ||||||
Hedged liability, cumulative increase (decrease) | $ 25,000,000 |
FINANCIAL INSTRUMENTS (Balance
FINANCIAL INSTRUMENTS (Balance Sheets) (Details) - Long-term Debt - Fair Value Hedging - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Carrying Amount of Hedged Long-Term Debt | $ 0 | $ 1,186 |
Hedge Accounting Basis Adjustment | $ 51 | $ (3) |
FINANCIAL INSTRUMENTS (Income S
FINANCIAL INSTRUMENTS (Income Statement) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Derivative [Line Items] | |||
Other income (expense), net | $ 76 | $ 20 | $ (8) |
Other Nonoperating Income (Expense) | |||
Derivative [Line Items] | |||
Hedged items (Long-term debt) | (68) | (65) | 4 |
Other Nonoperating Income (Expense) | Fair Value Hedging | |||
Derivative [Line Items] | |||
Derivatives designated as hedging instruments | $ 68 | $ 65 | $ (4) |
FINANCIAL INSTRUMENTS (Fair Val
FINANCIAL INSTRUMENTS (Fair Value of Derivatives) (Details) $ in Millions | Dec. 31, 2019USD ($) |
Designated as Hedging Instrument | Interest Rate Swap Agreements | Other Liabilities | |
Derivatives, Fair Value [Line Items] | |
Liability Derivatives: | $ 28 |
STOCKHOLDERS_ EQUITY AND REDE_3
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Mar. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Feb. 22, 2021 | Feb. 04, 2021 | Jul. 01, 2015 | |
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Preferred stock, par value | $ 1 | $ 1 | ||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | ||||||||||||||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | ||||||||||||||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | 600,000,000 | 600,000,000 | ||||||||||||||||
Dividends per common share | $ 0.56 | $ 0.56 | $ 0.56 | $ 0.56 | $ 0.53 | $ 0.53 | $ 0.53 | $ 0.53 | $ 0.53 | $ 0.50 | $ 0.50 | $ 0.50 | ||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 900,000,000 | $ 900,000,000 | ||||||||||||||||||
Treasury stock value acquired cost method | $ 325,000,000 | $ 350,000,000 | $ 325,000,000 | |||||||||||||||||
Reissuance of shares for employee benefit plan | 3,000,000 | 2,000,000 | 3,000,000 | |||||||||||||||||
Contributions from noncontrolling interest partners | $ 0 | $ 0 | $ 16,000,000 | |||||||||||||||||
Redeemable noncontrolling interest | 82,000,000 | $ 76,000,000 | 82,000,000 | 76,000,000 | ||||||||||||||||
UMass Joint Venture | ||||||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Ownership percentage by noncontrolling owners | 18.90% | |||||||||||||||||||
Redeemable noncontrolling interest | $ 82,000,000 | $ 76,000,000 | $ 82,000,000 | $ 76,000,000 | ||||||||||||||||
Treasury Stock, at Cost | ||||||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Purchases of treasury stock, shares | 2,700,000 | 3,500,000 | 3,400,000 | |||||||||||||||||
Treasury stock value acquired cost method | $ 325,000,000 | $ 350,000,000 | $ 325,000,000 | |||||||||||||||||
Treasury Stock, at Cost | Accounts Payable and Accrued Liabilities | ||||||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Accrual | $ 3,000,000 | $ 3,000,000 | ||||||||||||||||||
Forecast | ||||||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Dividends per common share | $ 0.62 | $ 2.48 | ||||||||||||||||||
Subsequent Event | ||||||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Increase in quarterly dividends as percent | 10.70% | |||||||||||||||||||
Additional authorized amount | $ 1,000,000,000 | |||||||||||||||||||
Maximum | ||||||||||||||||||||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | ||||||||||||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
STOCKHOLDERS_ EQUITY AND REDE_4
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST (Components of Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | $ (39) | ||
Net current period other comprehensive income | 18 | $ 20 | $ (9) |
Reclassification of stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act | 0 | ||
Ending Balance | (21) | (39) | |
Foreign Currency Translation Adjustments | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | (42) | (49) | (38) |
Other comprehensive (loss) income before reclassifications | 12 | 7 | (15) |
Amounts reclassified from accumulated other comprehensive loss | 3 | 0 | 4 |
Net current period other comprehensive income | 15 | 7 | (11) |
Reclassification of stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act | 0 | ||
Ending Balance | (27) | (42) | (49) |
Net Changes in Available-for-Sale Debt Securities | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | 8 | 0 | 0 |
Other comprehensive (loss) income before reclassifications | 0 | 8 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Net current period other comprehensive income | 0 | 8 | 0 |
Reclassification of stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act | 0 | ||
Ending Balance | 8 | 8 | 0 |
Net Deferred Losses on Cash Flow Hedges, net of tax | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | (4) | (9) | (9) |
Other comprehensive (loss) income before reclassifications | 1 | 3 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 2 | 2 | 2 |
Net current period other comprehensive income | 3 | 5 | 2 |
Reclassification of stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act | (2) | ||
Ending Balance | (1) | (4) | (9) |
Other | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | (1) | (1) | (1) |
Other comprehensive (loss) income before reclassifications | 0 | 0 | 0 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Net current period other comprehensive income | 0 | 0 | 0 |
Reclassification of stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act | 0 | ||
Ending Balance | (1) | (1) | (1) |
Accumulated Other Comprehensive Loss | |||
Stockholders’ Equity and Redeemable Noncontrolling Interest [Line Items] | |||
Beginning Balance | (39) | (59) | (48) |
Other comprehensive (loss) income before reclassifications | 13 | 18 | (15) |
Amounts reclassified from accumulated other comprehensive loss | 5 | 2 | 6 |
Net current period other comprehensive income | 18 | 20 | (9) |
Reclassification of stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act | (2) | ||
Ending Balance | $ (21) | $ (39) | $ (59) |
STOCK OWNERSHIP AND COMPENSAT_3
STOCK OWNERSHIP AND COMPENSATION PLANS (Employee and Non-employee Directors Stock Ownership Programs) (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Employee Long Term Incentive Plan ELTIP | |||
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 | 79,000 | ||
Restated Director Long-Term Incentive Plan (DLTIP) Amendment | |||
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) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Number of shares available for award | 2,400 | ||
Shares granted | 14 | 14 | 15 |
STOCK OWNERSHIP AND COMPENSAT_4
STOCK OWNERSHIP AND COMPENSATION PLANS (Weighted Average Assumptions Used in Valuing Options Granted) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value at grant date (in dollars per share) | $ 17.25 | $ 14.30 | $ 18.14 |
Expected volatility | 20.30% | 20.40% | 19.10% |
Dividend yield | 2.00% | 2.40% | 1.90% |
Risk-free interest rate | 1.50% | 2.50% | 2.80% |
Expected holding period, in years | 5 years | 5 years 2 months 12 days | 5 years 3 months 18 days |
Performance share units with market-based relative TSR goal | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value at grant date (in dollars per share) | $ 144.03 | ||
Expected volatility | 20.10% | ||
Dividend yield | 2.00% | ||
Risk-free interest rate | 1.40% |
STOCK OWNERSHIP AND COMPENSAT_5
STOCK OWNERSHIP AND COMPENSATION PLANS (Transactions Under Stock Option Plans) (Details) - Equity Option - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options outstanding, beginning of year | 8 | ||
Options granted | 1.1 | ||
Exercise of stock options, shares | (2.6) | ||
Options outstanding, end of year | 6.5 | 8 | |
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 | $ 81.67 | ||
Options, granted weighted average exercise price | 112.23 | ||
Options exercised weighted average exercise price | 72.57 | ||
Options outstanding, end of year weighted average exercise price | $ 90.32 | $ 81.67 | |
Options outstanding, end of year weighted average remaining contractual term | 6 years 8 months 12 days | ||
Options outstanding, end of year aggregate intrinsic value | $ 187 | ||
Exercisable, end of year shares | 3.9 | ||
Exercisable, end of year weighted average exercise price | $ 83.72 | ||
Exercisable, end of year weighted average remaining contractual term | 5 years 7 months 6 days | ||
Exercisable, end of year aggregate intrinsic value | $ 138 | ||
Vested and expected to vest, end of year shares | 6.4 | ||
Vested and expected to vest, end of year weighted average exercise price | $ 90.14 | ||
Vested and expected to vest, end of year weighted average remaining contractual term | 6 years 8 months 12 days | ||
Vested and expected to vest, end of year aggregate intrinsic value | $ 185 | ||
Total intrinsic value of options exercised | 113 | $ 62 | $ 67 |
Compensation not yet recognized, stock options | $ 9 | ||
Unrecognized stock-based compensation cost weighted average period | 1 year 7 months 6 days |
STOCK OWNERSHIP AND COMPENSAT_6
STOCK OWNERSHIP AND COMPENSATION PLANS (Activities Related to Stock Awards) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
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 | $ 97 | $ 56 | $ 61 | ||||||||
Income tax benefit related to stock-based compensation expense | 39 | 27 | 33 | ||||||||
Share-based compensation, excess tax benefit, amount | $ 8 | $ 3 | $ 4 | $ 8 | $ 2 | $ 3 | $ 5 | $ 3 | $ 23 | $ 13 | $ 18 |
Stock Awards | |||||||||||
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 | 1.1 | 1 | 1.1 | 1.3 | ||||||
Shares granted | 0.4 | 0.4 | 0.4 | ||||||||
Shares vested | (0.4) | (0.4) | (0.5) | ||||||||
Shares forfeited and cancelled | 0 | (0.1) | (0.1) | ||||||||
Shares outstanding, end of year | 1 | 1 | 1 | 1 | 1.1 | ||||||
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 | $ 93.30 | $ 88.13 | $ 93.30 | $ 88.13 | $ 77.90 | ||||||
Shares granted weighted average grant date fair value (in dollars per share) | 112.43 | 86.28 | 103.51 | ||||||||
Shares vested weighted average grant date fair value | 96.36 | 75.58 | 74 | ||||||||
Shares forfeited and cancelled weighted average grant date fair value | 0 | 94.09 | 90.16 | ||||||||
Shares outstanding, end of year weighted average grant date fair value | $ 100.12 | $ 93.30 | $ 100.12 | $ 93.30 | $ 88.13 | ||||||
Unrecognized stock-based compensation cost | $ 29 | $ 29 | |||||||||
Unrecognized stock-based compensation cost weighted average period | 1 year 6 months | ||||||||||
Total fair value of shares vested | $ 37 | $ 40 | $ 54 |
STOCK OWNERSHIP AND COMPENSAT_7
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, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Company's expense for contributions to its defined contribution plans | $ 64 | $ 84 | $ 78 |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Amended company match percentage of employee contributions | 5.00% | ||
Employee Stock Purchase Plan | |||
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 | 95.00% | ||
Number of shares available for award | 9,000 | ||
Shares purchased by eligible employees under ESPP | 225 | 269 | 326 |
STOCK OWNERSHIP AND COMPENSAT_8
STOCK OWNERSHIP AND COMPENSATION PLANS (Supplemental Deferred Compensation Plans) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Maximum | ||
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 | ||
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% | |
SDCP accrual | $ 67,000 | $ 59,000 |
Funds in a trust pertaining to all participant deferrals and company matching amounts related to the SDCP | $ 67,000 | 59,000 |
Supplemental Deferred Compensation Plan | Maximum | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Amended company match percentage of employee contributions | 5.00% | |
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 | $ 59,000 | 51,000 |
SDCP II vesting period | 4 years | |
SDCP II graded vesting percentage | 25.00% | |
Cash surrender value of life insurance policies | $ 50,000 | $ 43,000 |
SDCP II [Member] | Maximum | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Deferred compensation arrangement with individual, employer contribution | $ 5 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2020USD ($)claim | Oct. 22, 2020USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||||
Purchase obligation | $ 334,000,000 | |||
Purchase obligation in 2020 | 106,000,000 | |||
Purchase obligation in 2021 through 2022 | $ 103,000,000 | |||
Agreement to outsource billing and collection function | 10 years | |||
Remaining terms of lease obligations, maximum | 27 years | |||
New claims filed (in lawsuits) | claim | 2 | |||
Litigation reserves | $ 1,000,000 | $ 1,000,000 | ||
Self-insurance reserves | 138,000,000 | $ 132,000,000 | ||
Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Letters of credit outstanding, amount | $ 70,000,000 | |||
Secured Receivables Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Credit facility capacity | $ 600,000,000 | |||
Secured Receivables Credit Facility | Letter of Credit | ||||
Debt Instrument [Line Items] | ||||
Credit facility capacity | $ 100,000,000 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Percentage of net revenues from the DIS business | 100.00% | 100.00% | 100.00% | ||||||||
Total net revenues | $ 3,002 | $ 2,786 | $ 1,827 | $ 1,822 | $ 1,926 | $ 1,956 | $ 1,953 | $ 1,891 | $ 9,437 | $ 7,726 | $ 7,531 |
Total operating income | 1,971 | 1,231 | 1,101 | ||||||||
Non-operating expenses, net | (87) | (155) | (175) | ||||||||
Income from continuing operations before income taxes and equity in earnings of equity method investees | 1,884 | 1,076 | 926 | ||||||||
Income tax expense | (460) | (247) | (182) | ||||||||
Equity in earnings of equity method investees, net of taxes | 75 | 57 | 44 | ||||||||
Income from continuing operations | 609 | 591 | 193 | 106 | 265 | 226 | 219 | 176 | 1,499 | 886 | 788 |
Income (loss) from discontinued operations, net of taxes | 0 | 0 | 0 | 0 | 0 | 0 | 20 | 0 | 0 | 20 | 0 |
Net income | 609 | 591 | 193 | 106 | 265 | 226 | 239 | 176 | 1,499 | 906 | 788 |
Less: net income attributable to noncontrolling interests | 30 | 23 | 8 | 7 | 12 | 11 | 13 | 12 | 68 | 48 | 52 |
Net income attributable to Quest Diagnostics | $ 579 | $ 568 | $ 185 | $ 99 | $ 253 | $ 215 | $ 226 | $ 164 | 1,431 | 858 | 736 |
Depreciation and amortization | 361 | 329 | 309 | ||||||||
Total capital expenditures | 418 | 400 | 383 | ||||||||
Routine clinical testing services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 3,836 | 4,206 | 4,217 | ||||||||
COVID-19 testing services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 2,723 | 0 | 0 | ||||||||
Gene-based and esoteric (including advanced diagnostics) testing services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 2,098 | 2,620 | 2,409 | ||||||||
Anatomic pathology testing services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 482 | 579 | 578 | ||||||||
All other services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | $ 298 | $ 321 | $ 327 | ||||||||
DIS business | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Percentage of net revenues from the DIS business | 97.00% | 96.00% | 96.00% | ||||||||
Total net revenues | $ 9,139 | $ 7,405 | $ 7,204 | ||||||||
Total operating income | 2,201 | 1,298 | 1,235 | ||||||||
Depreciation and amortization | 249 | 226 | 213 | ||||||||
Total capital expenditures | 394 | 373 | 330 | ||||||||
All other operating segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total net revenues | 298 | 321 | 327 | ||||||||
Total operating income | 39 | 42 | 47 | ||||||||
Depreciation and amortization | 8 | 6 | 6 | ||||||||
Total capital expenditures | 15 | 20 | 16 | ||||||||
General corporate income (expenses), Net | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total operating income | (269) | (109) | (181) | ||||||||
Depreciation and amortization | 104 | 97 | 90 | ||||||||
Total capital expenditures | $ 9 | $ 7 | $ 37 | ||||||||
Minimum | DIS business | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Percentage of net revenues from the DIS business | 95.00% | 95.00% | 95.00% |
RELATED PARTIES (Details)
RELATED PARTIES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Additional contributions | $ 10 | ||
Equity Method Investee | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 34 | $ 35 | 36 |
Accounts receivable, related parties | 3 | 4 | |
Accounts payable, related parties | 1 | 2 | |
Dividends paid | 54 | 48 | 74 |
Equity Method Investee | Prepaid Expenses and Other Current Assets | |||
Related Party Transaction [Line Items] | |||
Other accounts receivable, related parties | 3 | 1 | |
Equity Method Investee | Selling, General and Administrative Expenses | |||
Related Party Transaction [Line Items] | |||
Income recognized from related party | 16 | 15 | $ 15 |
Corporate Joint Venture | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | $ 3 | 8 | |
Accounts receivable, related parties | $ 4 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - NID - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Gain on settling uncertain tax benefits | $ (20) | $ 20 |
Refund from taxing authorities related to settlement of the uncertain tax benefits | $ 28 |
Quarterly Operating Results (_3
Quarterly Operating Results (unaudited) (Schedule) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Data [Abstract] | |||||||||||
Net revenues | $ 3,002 | $ 2,786 | $ 1,827 | $ 1,822 | $ 1,926 | $ 1,956 | $ 1,953 | $ 1,891 | $ 9,437 | $ 7,726 | $ 7,531 |
Gross profit | 1,269 | 1,206 | 606 | 552 | 662 | 692 | 688 | 647 | 3,633 | 2,689 | |
Income from continuing operations | 609 | 591 | 193 | 106 | 265 | 226 | 219 | 176 | 1,499 | 886 | 788 |
Income (loss) from discontinued operations, net of taxes | 0 | 0 | 0 | 0 | 0 | 0 | 20 | 0 | 0 | 20 | 0 |
Net income | 609 | 591 | 193 | 106 | 265 | 226 | 239 | 176 | 1,499 | 906 | 788 |
Less: net income attributable to noncontrolling interests | 30 | 23 | 8 | 7 | 12 | 11 | 13 | 12 | 68 | 48 | 52 |
Net income attributable to Quest Diagnostics | $ 579 | $ 568 | $ 185 | $ 99 | $ 253 | $ 215 | $ 226 | $ 164 | $ 1,431 | $ 858 | $ 736 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - basic: | |||||||||||
Income from continuing operations (in dollars per share) | $ 4.28 | $ 4.20 | $ 1.38 | $ 0.74 | $ 1.88 | $ 1.59 | $ 1.52 | $ 1.22 | $ 10.62 | $ 6.21 | $ 5.39 |
Income from discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0 | 0 | 0.15 | 0 | 0 | 0.15 | 0 |
Net income (in dollars per share) | 4.28 | 4.20 | 1.38 | 0.74 | 1.88 | 1.59 | 1.67 | 1.22 | 10.62 | 6.36 | 5.39 |
Earnings per share attributable to Quest Diagnostics’ common stockholders - diluted: | |||||||||||
Income from continuing operations (in dollars per share) | 4.21 | 4.14 | 1.36 | 0.73 | 1.86 | 1.56 | 1.51 | 1.20 | 10.47 | 6.13 | 5.29 |
Income from discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | 0 | 0 | 0.15 | 0 | 0 | 0.15 | 0 |
Net income (in dollars per share) | $ 4.21 | $ 4.14 | $ 1.36 | $ 0.73 | $ 1.86 | $ 1.56 | $ 1.66 | $ 1.20 | $ 10.47 | $ 6.28 | $ 5.29 |
Quarterly Operating Results (_4
Quarterly Operating Results (unaudited) (Narrative) (Details) - USD ($) $ in Millions | Aug. 01, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Quarterly Financial Data [Line Items] | ||||||||||||
Amortization of intangible assets | $ 26 | $ 27 | $ 25 | $ 25 | $ 24 | $ 23 | $ 25 | $ 24 | $ 103 | $ 96 | $ 90 | |
Restructuring and integration charges | 15 | 18 | 9 | 16 | 14 | 16 | 26 | 22 | ||||
Pre-tax charges due to COVID-19 | 20 | 69 | 9 | |||||||||
Share-based compensation, excess tax benefit, amount | 8 | 3 | 4 | 8 | 2 | 3 | 5 | 3 | $ 23 | 13 | $ 18 | |
Pre-tax gain (loss) due to COVID-19 | (26) | |||||||||||
Income recognized due to receipt of initial tranche of funds from the CARES Act | 65 | |||||||||||
Reversal of income recognized due to receipt of initial tranche of funds from the CARES Act | 65 | |||||||||||
Gain recognized by an equity method investee to adjust certain of its investments to fair value, partially offset by a loss on retirement of debt | 2 | |||||||||||
Gain associated with an insurance claim for hurricane | 8 | |||||||||||
Cost incurred do to incident | 3 | |||||||||||
Gain from sale and leaseback of property | 72 | |||||||||||
NID | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Gain on settling uncertain tax benefits | 20 | (20) | ||||||||||
Mid America Clinical Laboratories, LLC (MACL) | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Equity interest in acquiree, remeasurement gain | $ 70 | |||||||||||
Percentage of voting interests acquired | 56.00% | 56.00% | ||||||||||
Cost of Sales | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring and integration charges | $ 11 | 6 | 7 | 11 | 11 | |||||||
Pre-tax charges due to COVID-19 | 19 | |||||||||||
Selling, General and Administrative Expenses | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring and integration charges | 7 | 8 | 9 | 15 | 11 | |||||||
Pre-tax charges due to COVID-19 | 2 | |||||||||||
Other Operating Income (Expense) | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Pre-tax charges due to COVID-19 | 1 | |||||||||||
Cost of Sales | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring and integration charges | 6 | 3 | 7 | |||||||||
Pre-tax charges due to COVID-19 | 3 | 1 | ||||||||||
Pre-tax gain (loss) due to COVID-19 | (34) | |||||||||||
Selling, General and Administrative Expenses | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Restructuring and integration charges | 9 | 6 | 9 | |||||||||
Pre-tax charges due to COVID-19 | 3 | |||||||||||
Pre-tax gain (loss) due to COVID-19 | (5) | |||||||||||
Gain recognized by an equity method investee to adjust certain of its investments to fair value, partially offset by a loss on retirement of debt | (2) | |||||||||||
Gain associated with an insurance claim for hurricane | (1) | |||||||||||
Cost incurred do to incident | 4 | |||||||||||
Gain from sale and leaseback of property | (1) | |||||||||||
Other Operating Income (Expense) | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Pre-tax charges due to COVID-19 | 65 | 5 | ||||||||||
Pre-tax gain (loss) due to COVID-19 | 62 | |||||||||||
Gain associated with an insurance claim for hurricane | 9 | |||||||||||
Contingent consideration arrangements | 6 | |||||||||||
Cost incurred do to incident | 7 | |||||||||||
Gain from sale and leaseback of property | 73 | $ (73) | ||||||||||
Other Income (Expense) | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Gain recognized by an equity method investee to adjust certain of its investments to fair value, partially offset by a loss on retirement of debt | (10) | |||||||||||
Other Income (Expense) | Mid America Clinical Laboratories, LLC (MACL) | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Equity interest in acquiree, remeasurement gain | $ 70 | |||||||||||
Intangible Assets | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Amortization of intangible assets | 28 | 30 | 28 | 28 | 27 | 25 | 30 | 29 | ||||
Equity in Earnings of Equity Method Investees | ||||||||||||
Quarterly Financial Data [Line Items] | ||||||||||||
Amortization of intangible assets | 2 | 3 | 3 | $ 3 | $ 3 | $ 2 | $ 5 | $ 5 | ||||
Pre-tax charges due to COVID-19 | (2) | $ 1 | ||||||||||
Pre-tax gain (loss) due to COVID-19 | $ 3 | |||||||||||
Gain recognized by an equity method investee to adjust certain of its investments to fair value, partially offset by a loss on retirement of debt | $ 14 |
Schedule II - Valuation Accou_2
Schedule II - Valuation Accounts and Reserves (Details) - SEC Schedule, 12-09, Allowance, Credit Loss - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Beginning balance | $ 15 | $ 15 | $ 13 |
Provision for doubtfull accounts | 19 | 11 | 6 |
Net deductions and other | 6 | 11 | 4 |
Ending balance | $ 28 | $ 15 | $ 15 |