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What changed in Quest Diagnostics's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Quest Diagnostics's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+462 added−412 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-22)

Top changes in Quest Diagnostics's 2024 10-K

462 paragraphs added · 412 removed · 357 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

269 edited+86 added−44 removed219 unchanged
Biggest changeThe accounting policies of the segments are the same as those of the Company as set forth in Note 2. 2023 2022 2021 Net revenues: DIS business $ 8,976 $ 9,609 $ 10,494 All other operating segments 276 274 294 Total net revenues $ 9,252 $ 9,883 $ 10,788 Operating earnings (loss): DIS business $ 1,547 $ 1,704 $ 2,646 All other operating segments 34 20 29 General corporate activities (319) (296) (294) Total operating income 1,262 1,428 2,381 Non-operating (expense) income, net (132) (193) 218 Income before income taxes and equity in earnings of equity method investees 1,130 1,235 2,599 Income tax expense (248) (264) (597) Equity in earnings of equity method investees, net of taxes 26 44 78 Net income 908 1,015 2,080 Less: Net income attributable to noncontrolling interests 54 69 85 Net income attributable to Quest Diagnostics $ 854 $ 946 $ 1,995 Depreciation and amortization expense for the years ended December 31, 2023, 2022 and 2021 were as follows: 2023 2022 2021 DIS business $ 319 $ 305 $ 294 All other operating segments 11 12 10 General corporate 109 120 104 Total depreciation and amortization $ 439 $ 437 $ 408 F-44 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Capital expenditures for the years ended December 31, 2023, 2022 and 2021 were as follows: 2023 2022 2021 DIS business $ 398 $ 384 $ 379 All other operating segments 8 19 14 General corporate 2 1 10 Total capital expenditures $ 408 $ 404 $ 403 The approximate percentage of net revenues by major service for the years ended December 31, 2023, 2022 and 2021 was as follows: 2023 2022 2021 Routine clinical testing and other services 51 % 44 % 40 % COVID-19 testing services 2 15 26 Gene-based and esoteric (including advanced diagnostics) testing services 38 32 26 Anatomic pathology testing services 6 6 5 All other 3 3 3 Net revenues 100 % 100 % 100 % The approximate percentage of net revenues by customer channel for the years ended December 31, 2023, 2022 and 2021 was as follows: 2023 2022 2021 Physician lab services 66 % 68 % 69 % Hospital lab services 21 18 17 Other DIS 10 11 11 Total DIS revenues 97 97 97 DS revenues 3 3 3 Total net revenues 100 % 100 % 100 % Physician lab services includes net revenues for physicians including those associated with ACOs and FQHCs. 21.
Biggest changeThe accounting policies of the segments are the same as those of the Company as set forth in Note 2. 2024 DIS Total Net revenues $ 9,614 $ 9,614 DS revenues 258 Total net revenues $ 9,872 Less: Other segment items (7,984) Segment operating income $ 1,630 $ 1,630 DS operating income 33 General corporate activities (317) Total operating income 1,346 Non-operating expense, net (171) Income before income taxes and equity in earnings of equity method investees 1,175 Income tax expense (273) Equity in earnings of equity method investees, net of taxes 19 Net income 921 Less: Net income attributable to noncontrolling interests 50 Net income attributable to Quest Diagnostics $ 871 F-49 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 2023 DIS Total Net revenues $ 8,976 $ 8,976 DS revenues 276 Total net revenues $ 9,252 Less: Other segment items (7,429) Segment operating income $ 1,547 $ 1,547 DS operating income 34 General corporate activities (319) Total operating income 1,262 Non-operating expense, net (132) Income before income taxes and equity in earnings of equity method investees 1,130 Income tax expense (248) Equity in earnings of equity method investees, net of taxes 26 Net income 908 Less: Net income attributable to noncontrolling interests 54 Net income attributable to Quest Diagnostics $ 854 2022 DIS Total Net revenues $ 9,609 $ 9,609 DS revenues 274 Total net revenues $ 9,883 Less: Other segment items (7,905) Segment operating income $ 1,704 $ 1,704 DS operating income 20 General corporate activities (296) Total operating income 1,428 Non-operating expense, net (193) Income before income taxes and equity in earnings of equity method investees 1,235 Income tax expense (264) Equity in earnings of equity method investees, net of taxes 44 Net income 1,015 Less: Net income attributable to noncontrolling interests 69 Net income attributable to Quest Diagnostics $ 946 Depreciation and amortization expense for the years ended December 31, 2024, 2023 and 2022 were as follows: 2024 2023 2022 DIS business $ 352 $ 319 $ 305 All other operating segments 13 11 12 General corporate 128 109 120 Total depreciation and amortization $ 493 $ 439 $ 437 F-50 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Capital expenditures for the years ended December 31, 2024, 2023 and 2022 were as follows: 2024 2023 2022 DIS business $ 410 $ 398 $ 384 All other operating segments 7 8 19 General corporate 8 2 1 Total capital expenditures $ 425 $ 408 $ 404 The approximate percentage of net revenues by major service for the years ended December 31, 2024, 2023 and 2022 was as follows: 2024 2023 2022 Routine clinical testing and other services 51 % 51 % 44 % COVID-19 testing services 1 2 15 Gene-based and esoteric (including advanced diagnostics) testing services 39 38 32 Anatomic pathology testing services 6 6 6 All other 3 3 3 Net revenues 100 % 100 % 100 % The approximate percentage of net revenues by customer channel for the years ended December 31, 2024, 2023 and 2022 was as follows: 2024 2023 2022 Physician lab services 68 % 66 % 68 % Hospital lab services 20 21 18 Other DIS 9 10 11 Total DIS revenues 97 97 97 DS revenues 3 3 3 Total net revenues 100 % 100 % 100 % Physician lab services includes net revenues for physicians including those associated with ACOs and FQHCs. 20.
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.
Inventories Inventories, which consist principally of finished goods testing supplies and reagents, are valued at the lower of cost (principally 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.
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.
The Company's primary objective is to achieve the lowest overall cost of funding while managing the variability in cash outflows within an acceptable range. In order to achieve this objective, the Company has entered into interest rate swap agreements. Interest rate swap agreements involve the periodic exchange of payments without the exchange of underlying principal or notional amounts.
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.
While the Company has receivables due from federal, state and foreign governmental agencies, the Company does not believe that such receivables represent a credit risk since the related healthcare programs are funded by federal, state and foreign governments, and payment is primarily dependent on submitting appropriate documentation timely.
For the year ended December 31, 2023, goodwill acquired was principally associated with the acquisitions of Haystack and select assets of the laboratory services business of New York-Presbyterian (see Note 6). For the year ended December 31, 2023, adjustments to goodwill related to foreign currency translation.
For the year ended December 31, 2024, adjustments to goodwill related to foreign currency translation. For the year ended December 31, 2023, goodwill acquired was principally associated with the acquisitions of Haystack and select assets of the laboratory services business of New York-Presbyterian (see Note 6).
Of the total restructuring and impairment charges incurred during the year ended December 31, 2023, $13 million, $12 million and $29 million were recorded in cost of services, selling, general and administrative expenses and other operating expense (income), net, respectively.
Of the total restructuring and impairment charges incurred during the year ended December 31, 2023, $13 million, $12 million and $29 million were recorded in cost of services, selling, general and administrative expenses and other operating expense, net, respectively.
The Company offers broad access to clinical testing through a nationwide network of laboratories, patient service centers, phlebotomists in physician offices, and connectivity resources, including call centers and mobile phlebotomists, nurses and other health and wellness professionals.
The Company offers broad access to clinical testing through a network of laboratories, patient service centers, phlebotomists in physician offices, and connectivity resources, including call centers and mobile phlebotomists, nurses and other health and wellness professionals.
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.
Gains and losses from foreign currency transactions, which are denominated in a currency other than the functional currency, are included within other operating expense, net in the consolidated statements of operations. Foreign currency transaction gains and losses have historically not been material.
The impacts of recent accounting pronouncements not yet effective (if any) on our audited consolidated financial statements are discussed in Note 2 to the audited consolidated financial statements. 72 Table of Contents REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of the Company, including its Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended.
The impacts of recent accounting pronouncements not yet effective (if any) on our audited consolidated financial statements are discussed in Note 2 to the audited consolidated financial statements. 73 Table of Contents REPORT OF MANAGEMENT ON INTERNAL CONTROL OVER FINANCIAL REPORTING The management of the Company, including its Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended.
Depreciation and amortization are principally provided on the straight-line method over expected useful asset lives as of December 31, 2023 as follows: • buildings and improvements, ranging up to thirty-one and a half years; • laboratory equipment and furniture and fixtures, ranging from five to twelve years; • leasehold improvements, the lesser of the useful life of the improvement or the remaining life of the building or lease, as applicable; and • computer software developed or obtained for internal use, principally five to ten years.
Depreciation and amortization are principally provided on the straight-line method over expected useful asset lives as of December 31, 2024 as follows: • buildings and improvements, ranging up to thirty-one and a half years; • laboratory equipment and furniture and fixtures, ranging from five to twelve years; • leasehold improvements, the lesser of the useful life of the improvement or the remaining life of the building or lease, as applicable; and • computer software developed or obtained for internal use, principally five to ten years.
F-39 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 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.
F-44 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 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.
F-8 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 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.
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 F-9 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 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.
Investments The Company's investments (except for those accounted for under the equity method of accounting) include: • Equity investments with readily determinable fair values, including investments comprised mostly of strategic holdings in companies concentrated in the life sciences and healthcare industries; as well as 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 18).
Investments The Company's investments (except for those accounted for under the equity method of accounting) include: • Equity investments with readily determinable fair values, including investments comprised mostly of strategic holdings in companies concentrated in the life sciences and healthcare industries; as well as 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).
We identified the following reporting units for goodwill impairment testing in 2023: • DIS business; • Risk assessment services business, which is part of our DS businesses The DIS reporting unit components have been aggregated into a single reporting unit because they have similar economic characteristics, including similarities in financial performance, nature of products or services, nature of production processes and types of customers.
We identified the following reporting units for goodwill impairment testing in 2024: • DIS business; • Risk assessment services business, which is part of our DS businesses The DIS reporting unit components have been aggregated into a single reporting unit because they have similar economic characteristics, including similarities in financial performance, nature of products or services, nature of production processes and types of customers.
The indefinite-lived intangible asset impairment test is performed at least annually, or more frequently in the case of other events that indicate a potential impairment. Based upon the Company’s most recent annual impairment tests completed during the fourth quarter of the years ended December 31, 2023 and 2022, the Company concluded that indefinite-lived intangible assets were not impaired.
The indefinite-lived intangible asset impairment test is performed at least annually, or more frequently in the case of other events that indicate a potential impairment. Based upon the Company’s most recent annual impairment tests completed during the fourth quarter of the years ended December 31, 2024 and 2023, the Company concluded that indefinite-lived intangible assets were not impaired.
The Company's practice is to issue shares related to its ESPP and stock-based compensation program solely from common stock held in treasury. See Note 17 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 Company's practice is to issue shares related to its ESPP and stock-based compensation program solely from common stock held in treasury. 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.
We believe that our cash and cash equivalents and cash from operations, together with our borrowing capacity under our credit facilities, will provide sufficient financial flexibility to fund seasonal and other working capital requirements, capital expenditures, debt service requirements and other obligations, cash dividends on common shares, share repurchases and additional growth opportunities for the foreseeable future.
We believe that our cash and cash equivalents and cash from operations, together with our borrowing capacity under our credit facilities, will provide sufficient financial flexibility to fund seasonal and other working capital requirements, capital expenditures, debt service requirements and other obligations, cash dividends on common shares, share repurchases and additional growth opportunities, including acquisitions, for the foreseeable future.
See Note 19 to the audited consolidated financial statements for a discussion of the various legal proceedings that we are involved in. The process of analyzing, assessing and establishing reserve estimates relative to legal proceedings involves a high degree of judgment. Management has established reserves for legal proceedings in accordance with generally accepted accounting principles in the United States.
See Note 18 to the audited consolidated financial statements for a discussion of the various legal proceedings that we are involved in. The process of analyzing, assessing and establishing reserve estimates relative to legal proceedings involves a high degree of judgment. Management has established reserves for legal proceedings in accordance with generally accepted accounting principles in the United States.
As of December 31, 2023, there was $5 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.
As of December 31, 2024, there was $5 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.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.
The F-14 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Company does not expect the adoption of this standard to have a material impact on its results of operations, financial position or cash flows. 3.
The Company does not expect the adoption of this standard to have a material impact on its results of operations, financial position or cash flows. F-15 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 3.
As of December 31, 2023 , the Company's borrowing rate for Term SOFR-based loans under the Credit Facility was adjusted Term SOFR plus 1.00%. 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.
As of December 31, 2024 , the Company's borrowing rate for Term SOFR-based loans under the Credit Facility was adjusted Term SOFR plus 1.00%. 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.
F-7 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions unless otherwise indicated) 1. DESCRIPTION OF BUSINESS Background Quest Diagnostics Incorporated and its subsidiaries ("Quest Diagnostics" or the "Company") work across the healthcare ecosystem to create a healthier world, one life at a time.
F-8 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in millions unless otherwise indicated) 1. DESCRIPTION OF BUSINESS Background Quest Diagnostics Incorporated and its subsidiaries ("Quest Diagnostics" or the "Company") work across the healthcare ecosystem to create a healthier world, one life at a time.
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. 9.
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. 8.
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 years ended December 31, 2023, 2022, and 2021, lease expense associated with short-term leases was not material.
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 years ended December 31, 2024, 2023, and 2022, lease expense associated with short-term leases was not material.
As of December 31, 2023, the borrowing rates under these debt instruments were: for our secured receivables credit facility, commercial paper rates for highly rated issuers or the adjusted Term SOFR, plus a spread of 0.80%; and for our senior unsecured revolving credit facility, the adjusted Term SOFR, plus 1.00%.
As of December 31, 2024, the borrowing rates under these debt instruments were: for our secured receivables credit facility, commercial paper rates for highly rated issuers or the adjusted Term SOFR, plus a spread of 0.80%; and for our senior unsecured revolving credit facility, the adjusted Term SOFR, plus 1.00%.
The remaining terms of the lease obligations and the Company's corresponding indemnifications range up to 24 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.
The remaining terms of the lease obligations and the Company's corresponding indemnifications range up to 23 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.
PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial statements included in this annual report, audited the Company's internal control over financial reporting as of December 31, 2023 and issued their audit report on the Company's internal control over financial reporting included herein. 73 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Quest Diagnostics Incorporated Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Quest Diagnostics Incorporated and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).
PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial statements included in this annual report, audited the Company's internal control over financial reporting as of December 31, 2024 and issued their audit report on the Company's internal control over financial reporting included herein. 74 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Quest Diagnostics Incorporated Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Quest Diagnostics Incorporated and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”).
Net revenues and accounts receivable recognized from healthcare insurers and government payers 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, additionally for healthcare insurers, the terms of the Company’s contractual arrangements.
Net revenues recognized from healthcare insurers and government payers 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, additionally for healthcare insurers, the terms of the Company’s contractual arrangements.
See "Available Information." Basis of Presentation Our DIS business currently represents our one reportable business segment. The DIS business for the years ended December 31, 2023 and 2022 accounted for greater than 95% of our consolidated net revenues. Our other operating segments consist of our DS businesses.
See "Available Information." Basis of Presentation Our DIS business currently represents our one reportable business segment. The DIS business for the years ended December 31, 2024 and 2023 accounted for greater than 95% of our consolidated net revenues. Our other operating segments consist of our DS businesses.
For further details regarding the fair value of the Company's contingent consideration, see Note 8. 2022 Acquisitions During 2022, the Company completed acquisitions for an aggregate purchase price of $162 million (including contingent consideration initially estimated at $18 million), net of cash acquired, including the acquisition discussed below.
For further details regarding the fair value of the Company's contingent consideration, see Note 7. 2022 Acquisitions During 2022, the Company completed acquisitions for an aggregate purchase price of $162 million (including contingent consideration initially estimated at $18 million), net of cash acquired, including the acquisition discussed below.
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, 2023, the Company does not believe that material losses related to legal matters are probable.
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, 2024, the Company does not believe that material losses related to legal matters are probable.
However, should it become necessary, we believe that our credit profile should provide us with access to additional financing in order to fund normal business operations, make interest payments, fund growth opportunities and satisfy upcoming debt maturities.
However, should it become necessary, we believe that our credit profile should provide us with access to additional financing in order to fund normal business operations, make interest payments, fund additional growth opportunities, including acquisitions, and satisfy upcoming debt maturities.
Changes in the cash F-22 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying investments.
Changes in the cash F-26 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying investments.
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 $12 million within the next twelve months.
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 $9 million within the next twelve months.
During the year ended December 31, 2023, the Company entered into forward-starting interest rate swap agreements with several financial institutions for a total notional amount of $500 million, which were accounted for as cash flow hedges.
During the year ended December 31, 2024, the Company entered into forward-starting interest rate swap agreements with several financial institutions for a total notional amount of $500 million, which were accounted for as cash flow hedges.
Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2023 based on criteria for effective internal control over financial reporting described in “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2024 based on criteria for effective internal control over financial reporting described in “Internal Control - Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission.
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 18.
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.
REVENUE RECOGNITION DIS Net revenues in the Company’s DIS business accounted for greater than 95% of the Company’s consolidated net revenues for the years ended December 31, 2023, 2022 and 2021 and are primarily comprised of a high volume of relatively low-dollar transactions.
REVENUE RECOGNITION DIS Net revenues in the Company’s DIS business accounted for greater than 95% of the Company’s consolidated net revenues for the years ended December 31, 2024, 2023 and 2022 and are primarily comprised of a high volume of relatively low-dollar transactions.
We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
District Court for the Eastern District of California, for allegedly conspiring with Facebook to track customers’ internet communications on Company web platforms without authorization, in violation of the California Invasion of Privacy Act and the California Confidentiality of Medical Information Act .
District Court for the Eastern District of California, for allegedly conspiring with Facebook to track customers’ internet communications on Company web platforms without authorization, in violation of the California Invasion of Privacy Act ("CIPA") and the California Confidentiality of Medical Information Act ("CMIA") .
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Our senior unsecured revolving credit facility is also subject to certain financial covenants and limitations on indebtedness. As of December 31, 2023, we were in compliance with all such applicable financial covenants.
Our senior unsecured revolving credit facility is also subject to certain financial covenants and limitations on indebtedness. As of December 31, 2024, we were in compliance with all such applicable financial covenants.
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 in 2021, 2022 and 2023 were based on the financial performance of the Company, as well as relative TSR.
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 in 2022, 2023 and 2024 were based on the financial performance of the Company, as well as relative TSR.
Reserves for general and professional liability claims As a general matter, providers of diagnostic information services may be subject to lawsuits alleging negligence or other similar claims. These suits could involve claims for substantial damages. Any professional liability litigation could also have an adverse impact on our client base and reputation.
Reserves for general and professional liability claims As a general matter, providers of diagnostic information services may be subject to lawsuits alleging negligence or other similar claims. These suits could involve claims for substantial damages. Any professional liability litigation could also 63 Table of Contents have an adverse impact on our client base and reputation.
Substantially all of the accounts receivable due from healthcare insurers represent amounts billed under fee-for-service arrangements. Collection of our 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.
Substantially all of the accounts receivable due from healthcare insurers represent amounts billed under fee-for-service arrangements. Collection of our net revenues from healthcare insurers is normally a function of providing complete and correct 62 Table of Contents billing information to the healthcare insurers within the various filing deadlines and generally occurs within 30 to 60 days of billing.
Equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) with readily determinable fair values are measured at fair value in prepaid expenses and other current assets in our consolidated balance sheet with changes in fair value recorded in current earnings in our consolidated statement of operations.
Equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) with readily determinable fair values are measured at fair value in prepaid expenses and other current assets in our consolidated balance sheet with changes in fair value recorded in 70 Table of Contents current earnings in our consolidated statement of operations.
The portfolios determined using the portfolio approach consist of the following payer customers: • Healthcare Insurers/Health Plans • Government Payers • Client Payers • Patients We have a standardized approach to estimate the amount of consideration that we expect to be entitled to, including the impact of contractual allowances (including payer denials), and patient price concessions.
The portfolios determined using the portfolio approach consist of the following payer customers: • Healthcare Insurers/Health Plans • Government Payers • Client Payers 61 Table of Contents • Patients We have a standardized approach to estimate the amount of consideration that we expect to be entitled to, including the impact of contractual allowances (including payer denials), and patient price concessions.
If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we are required to perform the quantitative goodwill impairment test. Otherwise, no further analysis is required.
If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting 64 Table of Contents unit is less than its carrying value, then we are required to perform the quantitative goodwill impairment test. Otherwise, no further analysis is required.
The assumptions and estimates used in the discounted cash flows model are based upon the best available information in the circumstances and include a forecast of expected future 63 Table of Contents cash flows, long-term growth rates, discount rates that are commensurate with economic risks, assumed income tax rates and estimates of capital expenditures and working capital.
The assumptions and estimates used in the discounted cash flows model are based upon the best available information in the circumstances and include a forecast of expected future cash flows, long-term growth rates, discount rates that are commensurate with economic risks, assumed income tax rates and estimates of capital expenditures and working capital.
The portfolios determined using the portfolio approach consist of the following groups of payer customers: healthcare insurers, government payers (Medicare and Medicaid programs), client payers and patients. Contracts 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 portfolios determined using the portfolio approach consist of the following groups of payer customers: healthcare insurers, government payers, client payers and patients. Contracts 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.
Valuation of Diagnostic Information Services (DIS) Business Accounts Receivable - Contractual Allowances As described in Note 3 to the consolidated financial statements, management estimates the amount of consideration it expects to be entitled to receive from customer groups in exchange for providing services using the portfolio approach.
Valuation of Diagnostic Information Services (DIS) Business Accounts Receivable - Contractual Allowances As described in Note 3 to the consolidated financial statements, management estimates the amount of consideration the Company expects to be entitled to receive from payer customer groups in exchange for providing services using the portfolio approach.
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 2019 tax year.
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 2020 tax year.
If any capitated 61 Table of Contents payments are not received on a timely basis, we determine the cause and make 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.
If any capitated payments are not received on a timely basis, we determine the cause and make 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.
The Company is cooperating with the investigation. 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.
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.
For the year ended December 31, 2023, 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, 2023, in accordance with its policy to perform a quantitative test on a periodic basis, the Company updated the fair value calculations for its reporting units, performed the quantitative impairment test, and concluded that goodwill was not impaired.
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, 2023, 2022 and 2021, gains/(losses) from all equity investments with readily determinable fair values totaled $20 million, $(55) million, and $56 million, respectively.
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, 2024, 2023 and 2022, gains/(losses) from all equity investments with readily determinable fair values totaled $18 million, $20 million, and $(55) million, respectively.
Further adjustments to the allowances, based on actual receipts, may be recorded upon settlement. 60 Table of Contents We regularly assess the state of our billing operations in order to identify issues which may impact the collectability of receivables or revenue estimates.
Further adjustments to the allowances, based on actual receipts, may be recorded upon settlement. We regularly assess the state of our billing operations in order to identify issues which may impact the collectability of receivables or revenue estimates.
Changes in the facts and circumstances associated with claims could have a material impact on our results of operations (principally costs of services), cash flows and financial condition in the period that reserve estimates are adjusted or paid.
Changes in the facts and circumstances associated with claims could have a material impact on the Company’s results of operations (principally costs of services), cash flows and financial condition in the period that reserve estimates are adjusted or paid. 19.
Based on this assessment, management has determined that the Company's internal control over financial reporting as of December 31, 2023 is effective.
Based on this assessment, management has determined that the Company's internal control over financial reporting as of December 31, 2024 is effective.
F-1 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In support of its risk management program, to ensure the Company’s performance or payment to third parties, $72 million in letters of credit under the Secured Receivables Credit Facility were outstanding as of December 31, 2023. The letters of credit primarily represent collateral for current and future automobile liability and workers’ compensation loss payments.
In support of its risk management program, to ensure the Company’s performance or payment to third parties, $73 million in letters of credit under the Secured Receivables Credit Facility were outstanding as of December 31, 2024. The letters of credit primarily represent collateral for current and future automobile liability and workers’ compensation loss payments.
Reserves for legal matters totaled $6 million and $2 million as of December 31, 2023 and December 31, 2022, respectively. Reserves for General and Professional Liability Claims As a general matter, providers of clinical testing services may be subject to lawsuits alleging negligence or other similar legal claims. These suits could involve claims for substantial damages.
Reserves for legal matters totaled $4 million and $6 million as of December 31, 2024 and December 31, 2023, respectively. Reserves for General and Professional Liability Claims As a general matter, providers of clinical testing services may be subject to lawsuits alleging negligence or other similar legal claims. These suits could involve claims for substantial damages.
As of December 31, 2023 and 2022, the Company had approximately $17 million and $16 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.
As of December 31, 2024 and 2023, the Company had approximately $24 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.
For interest on any U.S. Dollar-denominated outstanding amounts not covered under Term SOFR-based interest rate contracts, the Company can opt for an alternate base rate, which is calculated by reference to the prime rate, the federal funds rate or an adjusted Term SOFR rate. The Company also has the option to borrow in other currencies.
Dollar-denominated outstanding amounts not covered under Term SOFR-based interest rate contracts, the Company can opt for an alternate base rate, which is calculated by reference to the prime rate, the federal funds rate or an adjusted Term SOFR rate. The Company also has the option to borrow in other currencies.
The maximum number of shares that may be issued under the DLTIP is 2.4 million shares. For the years ended December 31, 2023, 2022 and 2021, grants under the DLTIP totaled 12 thousand shares, 10 thousand shares and 12 thousand shares, respectively.
The maximum number of shares that may be issued under the DLTIP is 2.4 million shares. For the years ended December 31, 2024, 2023 and 2022, grants under the DLTIP totaled 13 thousand shares, 12 thousand shares and 10 thousand shares, respectively.
In support of our risk management program, $72 million in letters of credit under the secured receivables credit facility were outstanding as of December 31, 2023. Our 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.
In support of our risk management program, $73 million in letters of credit under the secured receivables credit facility were outstanding as of December 31, 2024. Our 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.
Significant inputs include management’s estimate of revenue and other market inputs, including comparable company revenue volatility (40%) and a discount rate (10.5%).
Significant inputs include management’s estimate of revenue and other market inputs, including comparable company revenue volatility (35%) and a discount rate (10.5%).
Accruals for interest expense on contingent tax liabilities are classified in income tax expense in the consolidated statements of operations. Accruals for penalties have historically been immaterial. Interest expense (income) included in income tax expense in each of the years ended December 31, 2023, 2022 and 2021 was approximately $5 million, $3 million and $(2) million, respectively.
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, 2024, 2023 and 2022 was approximately $7 million, $5 million and $3 million, respectively.
Although the Company is currently contributing all participant deferrals and matching amounts to a trust, the funds in this trust, totaling $70 million and $68 million as of December 31, 2023 and 2022, respectively, are general assets of the Company and are subject to any claims of the Company's creditors.
Although the Company is currently contributing all participant deferrals and matching amounts to a trust, the funds in this trust, totaling $72 million and $70 million as of December 31, 2024 and 2023, respectively, are general assets of the Company and are subject to any claims of the Company's creditors.
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 $61 million and $52 million as of December 31, 2023 and 2022, respectively.
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 $68 million and $61 million as of December 31, 2024 and 2023, respectively.
In connection with the issuance of the 2033 Senior Notes (see Note 14), these agreements were settled and the Company received $1 million. These gains are deferred in stockholders' equity, net of taxes, as a component of accumulated other comprehensive loss, and amortized as an adjustment to interest expense, net over a ten-year period.
In connection with the issuance of the Senior Notes (see Note 13), these agreements were settled and the Company received $3 million. These gains are deferred in stockholders' equity, net of taxes, as a component of accumulated other comprehensive loss, and amortized as an adjustment to interest expense, net over a ten-year period.
Defined Contribution Plans The Company maintains qualified defined contribution plans covering substantially all of its employees. The maximum Company matching contribution is 5% of eligible employee compensation. The Company's expense for contributions to its defined contribution plans aggregated $96 million, $95 million and $93 million for 2023, 2022 and 2021, respectively.
Defined Contribution Plans The Company maintains qualified defined contribution plans covering substantially all of its employees. The maximum Company matching contribution is 5% of eligible employee compensation. The Company's expense for contributions to its defined contribution plans aggregated $99 million, $96 million and $95 million for 2024, 2023 and 2022, respectively.
The following table shows net accounts receivable as of December 31, 2023 applicable to each payer customer group: % of Consolidated Net Accounts Receivable Healthcare insurers 24% Government payers 7 Client payers 45 Patients (including coinsurance and deductible responsibilities) 20 Total DIS 96% Healthcare insurers/ Health Plans Reimbursements from healthcare insurers are based on fee-for-service schedules and on capitated payment rates.
The following table shows net accounts receivable as of December 31, 2024 applicable to each payer customer group: % of Consolidated Net Accounts Receivable Healthcare insurers 26% Government payers 7 Client payers 45 Patients (including coinsurance and deductible responsibilities) 20 Total DIS 98% Healthcare insurers/ Health Plans Reimbursements from healthcare insurers are based on fee-for-service schedules and on capitated payment rates.
For further details regarding our business segment information, see Note 20 to the audited consolidated financial statements.
For further details regarding our business segment information, see Note 19 to the audited consolidated financial statements.
As of December 31, 2023 and 2022, the fair value of our debt was estimated at approximately $4.6 billion and $3.7 billion, respectively, principally using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments.
As of December 31, 2024 and 2023, the fair value of our debt was estimated at approximately $6.1 billion and $4.6 billion, respectively, principally using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments.
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.
Net revenues recognized for fee-for-service arrangements principally 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.
Under the ESPP, the maximum number of shares of Quest Diagnostics common stock which may be purchased by eligible employees is 9 million. Approximately 208 thousand shares, 216 thousand shares and 200 thousand shares of common stock were purchased by eligible employees in 2023, 2022 and 2021, respectively.
Under the ESPP, the maximum number of shares of Quest Diagnostics common stock which may be purchased by eligible employees is 9 million. Approximately 191 thousand shares, 208 thousand shares and 216 thousand shares of common stock were purchased by eligible employees in 2024, 2023 and 2022, respectively.
Income tax benefits recognized in the consolidated statements of operations related to stock-based compensation expense totaled $24 million, $27 million and $32 million for the years ended December 31, 2023, 2022 and 2021, respectively, which includes excess tax benefits associated with stock-based compensation arrangements of $11 million, $14 million and $19 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Income tax benefits recognized in the consolidated statements of operations related to stock-based compensation expense totaled $24 million, $24 million and $27 million for the years ended December 31, 2024, 2023 and 2022, respectively, which includes excess tax benefits associated with stock-based compensation arrangements of $9 million, $11 million and $14 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The approximate percentage of net accounts receivable by type of payer customer as of December 31, 2023 and 2022 was as follows: 2023 2022 Healthcare insurers 24% 28% Government payers 7 6 Client payers 45 44 Patients (including coinsurance and deductible responsibilities) 20 18 Total DIS 96 96 DS 4 4 Net accounts receivable 100% 100% The following table summarizes the activity for the Company's allowance for credit losses during the years ended December 31, 2023 and 2022, which principally relates to client payers: Allowance for Credit Losses Balance, December 31, 2021 $ 31 Provision for credit losses 3 Write-offs of accounts receivable, net of recoveries (4) Balance, December 31, 2022 30 Provision for credit losses 1 Write-offs of accounts receivable, net of recoveries (4) Balance, December 31, 2023 $ 27 F-17 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 4.
The approximate percentage of net accounts receivable by type of payer customer as of December 31, 2024 and 2023 was as follows: 2024 2023 Healthcare insurers 26% 24% Government payers 7 7 Client payers 45 45 Patients (including coinsurance and deductible responsibilities) 20 20 Total DIS 98 96 DS 2 4 Net accounts receivable 100% 100% The following table summarizes the activity for the Company's allowance for credit losses during the years ended December 31, 2024 and 2023, which principally relates to client payers: Allowance for Credit Losses Balance, December 31, 2022 $ 30 Provision for credit losses 1 Write-offs of accounts receivable, net of recoveries (4) Balance, December 31, 2023 27 Provision for credit losses 5 Write-offs of accounts receivable, net of recoveries (3) Balance, December 31, 2024 $ 29 F-18 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 4.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

75 edited+18 added−10 removed94 unchanged
Biggest changeAMCA, which provided debt collection services for a company that provides revenue management services to the Company, informed the Company in May 2019 that AMCA had learned that an unauthorized user had access to AMCA’s system during 2018 and 2019. AMCA’s affected system included financial, medical and other personal information.
Biggest changeFor example, in June 2019, the Company reported that Retrieval-Masters Creditors Bureau, Inc./American Medical Collection Agency (AMCA), informed the Company that an unauthorized user had access to AMCA’s system. AMCA previously provided debt collection services for the Company and provided debt collection services for a company that provides revenue management services to the Company.
We also believe that health plans and consumers increasingly are focusing on driving better value in laboratory testing services. We expect that the evolution of the healthcare industry will continue, and that industry change is likely to be extensive.
We expect that the evolution of the healthcare industry will continue, and that industry change is likely to be extensive. We also believe that health plans and consumers increasingly are focusing on driving better value in laboratory testing services. We expect that the evolution of the healthcare industry will continue, and that industry change is likely to be extensive.
Competitors also may offer new testing services that can be performed outside of a commercial clinical laboratory, such as point-of-care testing that can be administered by physicians in their offices, complex testing that can be performed by hospitals in their own laboratories, and home testing that can be carried out without requiring the services of outside providers.
Competitors also may offer new testing services that can be performed outside of a commercial clinical laboratory, such as point-of-care testing that can be administered by physicians in their offices, complex testing that can be performed by hospitals in their own laboratories, and home testing that can be carried out without requiring the services of outside providers.
This technology, including generative AI, which is in its early stages of commercial implementation, presents a number of risks inherent in its use, including risks related to cybersecurity, privacy and data use practices. Additionally, AI technology can create accuracy issues and other outcomes that could harm our customers and negatively impact our reputation and our business.
This technology, including generative AI, which is in its early stages of commercial implementation, presents a number of risks inherent in its use, including risks related to cybersecurity, privacy and data security and use practices. Additionally, AI technology can create accuracy issues and other outcomes that could harm our customers and negatively impact our reputation and our business.
Our operations may be adversely impacted by the effects of natural disasters such as hurricanes and earthquakes, public health emergencies and pandemics, geopolitical matters, hostilities or acts of terrorism and other criminal activities. We operate facilities across the United States, and consumers frequently visit our facilities in person.
Our operations may be adversely impacted by the effects of natural disasters such as hurricanes and earthquakes, public health emergencies and pandemics, geopolitical matters, hostilities or acts of terrorism and other criminal activities. We operate facilities primarily across the United States, and consumers frequently visit our facilities in person.
If our IT systems are successfully attacked, it could result in major disruption of our business, compromise confidential information, and result in litigation and potential liability for the Company, government investigation, significant damage to our reputation or otherwise adversely affect our business.
If our IT systems are successfully attacked, it could result in major and/or prolonged disruption of our business, compromise confidential information, and result in litigation and potential liability for the Company, government investigation, significant damage to our reputation or otherwise adversely affect our business.
Our success in continuing to introduce new solutions, technology and services will depend, in part, on our ability to develop or license new and improved technologies on favorable terms. We may be unable to develop or introduce new solutions or services.
Our success in continuing to introduce new solutions, technology and services will depend, in part, on our ability to develop or license new and improved technologies on favorable terms. We may be unable to develop, introduce or commercialize new solutions or services.
We are involved in various legal proceedings arising in the ordinary course of business including, among other things, disputes as to intellectual property, professional liability and employee-related matters, as well as inquiries from governmental agencies and Medicare or Medicaid carriers. Some proceedings against us involve claims that are substantial in amount and could divert management's attention from operations.
We are involved in various legal proceedings arising in the ordinary course of business including, among other things, disputes as to intellectual property, professional liability and employee-related matters, as well as inquiries from governmental authorities and Medicare or Medicaid carriers. Some proceedings against us involve claims that are substantial in amount and could divert management's attention from operations.
Regardless of merit or eventual outcome, these types of investigations and related litigation can result in: • diversion of management time and attention; • expenditure of large amounts of cash on legal fees, costs and payment of damages; • increases to our administrative, billing or other operating costs; • limitations on our ability to continue some of our operations; • enforcement actions, fines and penalties or the assertion of private litigation claims and damages; • decreases to the amount of reimbursement related to diagnostic information services performed; • adverse effects to important business relationships with third parties; • decreased demand for our services; and/or • injury to our reputation.
Regardless of merit or eventual outcome, these types of investigations and related litigation can result in: • diversion of management time and attention; • expenditure of large amounts of cash on legal fees, costs and payment of damages; • increases to our administrative, billing or other operating costs; • limitations on our ability to continue some of our operations; • enforcement actions, fines and penalties or the assertion of private litigation claims and damages; • decreases to the amount of reimbursement related to diagnostic information services performed; • adverse effects to important business relationships with third parties; • decreased demand for our services; and/or 32 Table of Contents • injury to our reputation.
Our international operations increase our exposure to risks inherent in doing business in non-U.S. markets, which may vary by market and include: intellectual property legal protections and remedies; weak legal systems which may, among other things, affect our ability to enforce contractual rights; trade regulations and procedures and actions affecting approval, production, pricing, supply, reimbursement and marketing of products and services; existing and emerging data privacy regulations affecting the processing and transfer of personal data; emerging regulations relating to the use of AI; and challenges based on differing languages and cultures.
Our international operations increase our exposure to risks inherent in doing business in non-U.S. markets, which may vary by market and include: intellectual property legal protections and remedies; weak legal systems which may, among other things, affect our ability to enforce contractual rights; trade regulations and procedures and actions affecting approval, production, pricing, supply, reimbursement and marketing of products and services; existing and emerging data privacy regulations affecting the processing and transfer of personal data; new regulations relating to the use of AI; and challenges based on differing languages, cultures and unfamiliar practices.
ACOs and hospitals also may undertake efforts to reduce utilization of, or reimbursement for, diagnostic information services. The healthcare industry has experienced a trend of consolidation among health insurance plans, resulting in fewer but larger insurance plans with significant bargaining power to negotiate fee arrangements with clinical testing providers.
ACOs and hospitals also may undertake efforts to reduce utilization of, or reimbursement for, diagnostic information services. The healthcare industry has experienced a trend of consolidation among health insurance plans, resulting in fewer but larger insurance plans with significant bargaining power to negotiate fee arrangements with us and other clinical testing providers.
Although we believe that we are in compliance, in all material respects, with applicable laws and regulations, there can be no assurance that a regulatory agency or tribunal would not reach a different conclusion. The federal or state government may bring claims based on our current practices, which we believe are lawful.
Although we believe that we are in compliance, in all material respects, with applicable billing-related laws and regulations, there can be no assurance that a regulatory agency or tribunal would not reach a different conclusion. The federal or state government may bring claims based on our current practices, which we believe are lawful.
In addition, we may be subject to intellectual property litigation, and we may be found to infringe on the proprietary rights of others, which could force us to do one or more of the following: • cease developing, performing or selling solutions or services that incorporate the challenged intellectual property; 33 Table of Contents • obtain and pay for licenses from the holder of the infringed intellectual property right; • redesign or re-engineer our tests; • change our business processes; or • pay substantial damages, court costs and attorneys' fees, including potentially increased damages for any infringement held to be willful.
In addition, we may be subject to intellectual property litigation, and we may be found to infringe on the proprietary rights of others, which could force us to do one or more of the following: • cease developing, performing or selling solutions or services that incorporate the challenged intellectual property; • obtain and pay for licenses from the holder of the infringed intellectual property right; • redesign or re-engineer our tests; • change our business processes; or • pay substantial damages, court costs and attorneys' fees, including potentially increased damages for any infringement held to be willful.
Congress reintroduced federal legislation in 2023 (the Saving Access to Laboratory Services Act), which, if enacted, would reform PAMA and create a true market-based CLFS. In addition, CMS has adopted policies limiting or excluding coverage for clinical tests that we perform.
Congress reintroduced federal legislation in 2023 (the Saving Access to Laboratory Services Act), which would reform PAMA and create a true market-based CLFS. In addition, CMS has adopted policies limiting or excluding coverage for clinical tests that we perform.
The qui tam provisions of the federal False Claims Act and similar provisions in certain state false claims acts allow private individuals to bring lawsuits against healthcare companies on behalf of government payers, private payers and/or patients alleging inappropriate billing practices.
The qui tam provisions of the federal False Claims Act and similar provisions in certain state false claims acts allow private individuals to bring lawsuits against healthcare companies, like us, on behalf of government payers, private payers and/or patients alleging inappropriate billing practices.
The ability of our employees and consumers to access our facilities may be adversely impacted by the effects of extreme weather events and 37 Table of Contents natural disasters, such as hurricanes, earthquakes, tropical storms, floods, fires, or other extreme weather conditions, including major winter storms, droughts and heat waves; public health emergencies and pandemics; geopolitical matters, hostilities or acts of terrorism or other activities.
The ability of our employees and consumers to access our facilities may be adversely impacted by the effects of extreme weather events and natural disasters, such as hurricanes, earthquakes, tropical storms, floods, fires, or other extreme weather conditions, including major winter storms, droughts and heat waves; public health emergencies and pandemics; geopolitical matters, hostilities or acts of terrorism or other activities.
While we seek to conduct our business in compliance with all applicable laws, many of the laws and regulations applicable to us are vague or indefinite and have not been extensively interpreted by the courts, including, among other things, many of those relating to: • billing and reimbursement of clinical testing; 31 Table of Contents • certification or licensure of clinical laboratories; • the anti-self-referral and anti-kickback laws and regulations; • the laws and regulations administered by the FDA; • the corporate practice of medicine; • operational, personnel and quality requirements intended to ensure that clinical testing services are accurate, reliable and timely; • physician fee splitting; • relationships with physicians and hospitals; • marketing to consumers; • privacy of patient data and other personal information; • safety and health of laboratory employees; and • handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials.
While we seek to conduct our business in compliance with all applicable laws, many of the laws and regulations applicable to us are vague or indefinite and have not been extensively interpreted by the courts, including, among other things, many of those relating to: • billing and reimbursement of clinical testing; • certification or licensure of clinical laboratories; • the anti-self-referral and anti-kickback laws and regulations; • the laws and regulations administered by the FDA; • the corporate practice of medicine; • operational, personnel and quality requirements intended to ensure that clinical testing services are accurate, reliable and timely; • physician fee splitting; • relationships with physicians and hospitals; • marketing to consumers; • protection and privacy of patient data and other personal information; • use of AI; • safety and health of laboratory employees; and • handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive materials.
(u) Increases in interest rates and negative changes in our credit ratings from Standard & Poor's, Moody's Investor Services or Fitch Ratings causing an unfavorable impact on our cost of or access to capital. 39 Table of Contents (v) Inability to hire or retain qualified employees, including key senior management personnel, and maintain good relations with our employees.
(u) Increases in interest rates and negative changes in our credit ratings from Standard & Poor's, Moody's Investor Services or Fitch Ratings causing an unfavorable impact on our cost of or access to capital. (v) Inability to hire or retain qualified employees, including key senior management personnel, and maintain good relations with our employees.
Some health plans also are reviewing test coding, evaluating coverage decisions, requiring additional documentation for claims payment and requiring preauthorization of certain testing. There are also an increasing number of patients enrolling in consumer driven products and high deductible plans that involve greater patient cost-sharing.
Some health plans also are reviewing test coding, evaluating coverage decisions, requiring additional documentation for claims 30 Table of Contents payment and requiring preauthorization of certain testing. There are also an increasing number of patients enrolling in consumer driven products and high deductible plans that involve greater patient cost-sharing.
Government payers, such as Medicare and Medicaid, have taken steps to reduce the utilization and reimbursement of healthcare services, including clinical testing services. 29 Table of Contents We face efforts by government payers to reduce utilization of and reimbursement for diagnostic information services. One example of this is increased use of prior authorization requirements.
Government payers, such as Medicare and Medicaid, have taken steps to reduce the utilization and reimbursement of healthcare services, including clinical testing services. We face efforts by government payers to reduce utilization of and reimbursement for diagnostic information services. One example of this is increased use of prior authorization requirements.
We expect efforts to reduce reimbursements, to impose more stringent cost controls and to reduce utilization of clinical test services will continue. Pursuant to PAMA, reimbursement rates for many clinical laboratory tests provided under Medicare were reduced during 2018 - 2020.
We expect efforts to reduce reimbursements, to impose more stringent cost controls and to reduce utilization of clinical test services will continue. 29 Table of Contents Pursuant to PAMA, reimbursement rates for many clinical laboratory tests provided under Medicare were reduced during 2018 - 2020.
Business,” “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K. Item 1B. Unresolved Staff Comments There are no unresolved SEC comments that require disclosure.
Business,” “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K. 40 Table of Contents Item 1B. Unresolved Staff Comments There are no unresolved SEC comments that require disclosure.
Steps to reduce utilization and reimbursement also discourage innovation and access to innovative solutions that we may offer. Failure to develop, or acquire licenses for, new tests, technology and services could negatively impact our testing volume and revenues. The diagnostic information services industry is faced with changing technology and new product introductions.
Steps to reduce utilization and reimbursement also discourage innovation and access to innovative solutions that we may offer. Failure to develop, acquire licenses for, introduce, or commercialize new tests, technology and services could negatively impact our testing volume, revenues and profitability. The diagnostic information services industry is faced with changing technology and regulation and new product introductions.
These technological advances (and the ones yet to come) and the continued internalization of testing services may lead to the need for less frequent testing and/or less use of the testing services we offer. 34 Table of Contents We have been and expect to continue to use AI technology in the testing services we offer.
These technological advances (and the ones yet to come) and the continued internalization of testing services may lead to the need for less frequent testing and/or less use of the testing services we offer. We have been and expect to continue to use AI technology in the testing services we offer.
The increased consolidation among health plans also has increased pricing transparency, insurer bargaining power and the potential 30 Table of Contents adverse impact of ceasing to be a contracted provider with an insurer.
The increased consolidation among health plans also has increased pricing transparency, insurer bargaining power and the potential adverse impact of ceasing to be a contracted provider with an insurer.
Our debt agreements contain various restrictive covenants. These restrictions could limit our ability to use operating cash flow in other areas of our business because we must use a portion of these funds to make principal and interest payments on our debt. We have obtained ratings on our public debt from Standard and Poor's, Moody's Investor Services and Fitch Ratings.
These restrictions could limit our ability to use operating cash flow in other areas of our business because we must use a portion of these funds to make principal and interest payments on our debt. We have obtained ratings on our public debt from Standard and Poor's, Moody's Investor Services and Fitch Ratings.
Integration of acquisitions involves a number of risks including the diversion of management's attention to the assimilation of the operations of assets or businesses we have acquired, difficulties in the diligence and integration of operations and systems and the realization of potential operating synergies, or introduction of IT security vulnerabilities not adequately investigated during diligence, the assimilation and retention of the personnel of the acquired businesses, challenges in retaining the customers of the combined businesses, and potential adverse effects on operating results.
Integration of acquisitions involves a number of risks including the diversion of management's attention to the assimilation of the operations of assets or businesses we have acquired, difficulties in the diligence and integration of operations and systems and the realization of potential operating synergies, or introduction of IT security vulnerabilities not adequately investigated during diligence or managed after acquisition, the integration and retention of the personnel of the acquired businesses and of our existing business, challenges in retaining the customers of the combined businesses, and potential adverse effects on operating results.
Reimbursement for Medicare services also is subject to annual reduction under the Budget Control Act of 2011, and the Statutory Pay-As-You-Go Act of 2010. From time to time, the federal government has considered whether competitive bidding could be used to provide clinical testing services for Medicare beneficiaries while maintaining quality and access to care. Congress periodically considers cost-saving initiatives.
Reimbursement for Medicare services also is subject to annual reduction under the Budget Control Act of 2011, and the Statutory Pay-As-You-Go Act of 2010. From time to time, the federal government has considered whether competitive bidding could be used to provide clinical testing services for Medicare beneficiaries while maintaining quality and access to care.
Our business is subject to or impacted by extensive and frequently changing laws and regulations in the United States (including at both the federal and state levels) and the other jurisdictions in which we engage in business.
Our business is subject to or impacted by extensive and frequently changing laws and regulations in the United States (including at both the federal and state levels) and the other jurisdictions where we engage in business, including Canada and Europe.
The process of combining acquisitions may be disruptive to our businesses and may cause an interruption of, or a loss of momentum in, such businesses as a result of the following difficulties, among others: • loss of key customers or employees; • difficulty in standardizing information and other systems; • difficulty in consolidating facilities and infrastructure; • failure to maintain the quality or timeliness of services that our Company has historically provided; • diversion of management's attention from the day-to-day business of our Company as a result of the need to deal with the foregoing disruptions and difficulties; and • the added costs of dealing with such disruptions.
The process of combining acquisitions may be disruptive to our businesses and may cause an interruption of, or a loss of momentum in, such businesses as a result of the following difficulties, among others: • loss of key customers or employees; • difficulty and/or delays in standardizing information and other systems; • difficulty in consolidating facilities and infrastructure; • failure to maintain the quality or timeliness of services that our Company has historically provided; • failing to satisfy the performance requirements of the physicians associated with an acquired outreach business; • diversion of management's attention from the day-to-day business of our Company as a result of the need to deal with the foregoing disruptions and difficulties; and • the added costs of dealing with such disruptions.
In addition, we collaborate with government agencies regarding potential cybersecurity threats and have worked with firms that have cyber security expertise to evaluate our systems and the attacks we experience and strengthen 36 Table of Contents our systems.
In addition, we collaborate with government agencies regarding potential cybersecurity threats and have worked with firms that have cyber security expertise to evaluate our systems and the attacks we experience and strengthen our systems.
See “Cautionary Factors that May Affect Future Results” on page 38 . 28 Table of Contents RISKS RELATED TO OUR BUSINESS The U.S. healthcare system continues to evolve, and medical laboratory testing market fundamentals are changing, and our business could be adversely impacted if we fail to adapt. The U.S. healthcare system continues to evolve.
See “Cautionary Factors that May Affect Future Results.” 28 Table of Contents RISKS RELATED TO OUR BUSINESS The U.S. healthcare system continues to evolve, and medical laboratory testing market fundamentals are changing, and our business could be adversely impacted if we fail to adapt. The U.S. healthcare system continues to evolve.
We may be sued under physician liability or other liability law for acts or omissions by our pathologists, laboratory personnel and hospital employees who are under our supervision. We are subject to the attendant risk of substantial damages awards and risk to our reputation.
We may be sued under medical liability or other liability laws for alleged acts or omissions by our pathologists, laboratory personnel and hospital employees who are under our supervision. We are subject to the attendant risk of substantial damages awards and risk to our reputation.
In addition, they could introduce new tests, technologies or services that may result in a decrease in the demand for our services or cause us to reduce the prices of our services.
In addition, our competitors or other companies could introduce new tests, technologies or services that may result in a decrease in the demand for our services or cause us to reduce the prices of our services.
Failure to accurately bill for our services, or to comply with applicable laws relating to government healthcare programs, could have a material adverse effect on our business . Billing for diagnostic information services is complex and subject to extensive and non-uniform rules and administrative requirements.
For more information, see above under the heading “Regulation". Failure to accurately bill for our services, or to comply with applicable laws relating to billing government healthcare programs, could have a material adverse effect on our business . Billing for diagnostic information services is complex and subject to extensive and non-uniform rules and administrative requirements.
The diagnostic information services industry is facing rapidly changing technology and innovations in product offerings, including technology that enables more convenient, accessible and cost-effective testing. For example, digital pathology is an emerging technology that may change the practice of pathology and our role in it.
The diagnostic information services industry is facing rapidly changing technology and innovations in product offerings, including technology that enables more convenient, accessible and cost-effective testing. For example, digital pathology is a technology that we are currently deploying that may change the practice of pathology and our role in it.
Hardware and software failures or delays in our IT systems, including failures resulting from our systems conversions or otherwise, could disrupt our operations and cause the loss of confidential information, customers and business opportunities or otherwise adversely impact our business.
Hardware and software failures or delays in our IT systems, including failures resulting from our systems conversions, services and support provided by third parties, or otherwise, could disrupt our operations and cause the loss of confidential information, customers and business opportunities or otherwise adversely impact our business.
There can be no assurance that the Company can anticipate all evolving future attacks, viruses or intrusions, implement adequate preventative measures, or remediate any security vulnerabilities.
There can be no assurance that the Company can anticipate all evolving future attacks, viruses or intrusions, implement adequate preventative measures, or remediate any security vulnerabilities on a timely basis or at all.
The services that we provide are intended to provide information in providing patient care. Therefore, users of our services may have a greater sensitivity to errors than the users of services or products that are intended for other purposes. Negligence in performing our services can lead to injury or other adverse events.
The services that we provide are intended to provide information in providing patient care. Therefore, users of our services may have a greater sensitivity to errors than the users of services or products that are intended for other purposes. Claims of injury or other adverse events can result from the provision of our services.
External actors may develop and deploy viruses, other malicious software programs, ransomware attacks, AI, distributed denial of service attacks or other attempts to harm or obtain unauthorized access to our systems.
External actors may develop and deploy viruses, other malicious software programs, ransomware attacks, distributed denial of service attacks or other attempts to harm or obtain unauthorized access to our systems, including through the use of AI and other emerging technologies.
It is important that we continue to strengthen our efficiency to promote our competitive position and enable us to mitigate the impact on our profitability of steps taken by government payers and health insurers to reduce the utilization and reimbursement of diagnostic information services, and to partly offset pressures from the current inflationary environment, including labor and benefit cost increases, and reimbursement pressures.
Our business could be negatively affected if we are unable to continue to strengthen our efficiency. 35 Table of Contents It is important that we continue to strengthen our efficiency to promote our competitive position and enable us to mitigate the impact on our profitability of steps taken by government payers and health insurers to reduce the utilization and reimbursement of diagnostic information services, and to partly offset pressures from the current inflationary environment, including labor and benefit cost increases, and reimbursement pressures.
Examples include increased use of prior authorization requirements and increased denial of coverage for services. There is increased market activity regarding alternative payment models, including bundled payment models. We expect continuing efforts by third-party payers, including in their rules, practices and policies, to reduce reimbursements, to impose more stringent cost controls and to reduce utilization of clinical testing services.
There is increased market activity regarding alternative payment models, including bundled payment models. We expect continuing efforts by third-party payers, including in their rules, practices and policies, to reduce reimbursements, to impose more stringent cost controls and to reduce utilization of clinical testing services.
The FDA has regulatory responsibility over, among other areas, instruments, software, test kits, reagents and other devices used by clinical laboratories to perform diagnostic testing in the United States A number of tests we develop internally are offered as LDTs.
The FDA has regulatory responsibility over, among other areas, instruments, software, test systems, collection kits, reagents and other devices used by clinical laboratories to perform diagnostic testing in the United States. We offer companion diagnostic testing services to pharmaceutical companies that are regulated by the FDA. A number of tests we develop internally are offered as LDTs.
The Company’s systems or databases were not involved in this incident. A breach or attack affecting third parties with whom we engage could also harm our business, results of operations and reputation and subject us to liability.
AMCA’s affected system included financial, medical and other personal information. The Company’s systems or databases were not involved in this incident. A breach or attack affecting third parties with whom we engage could also harm our business, results of operations and reputation and subject us to liability.
These challenges may affect our ability to transport specimens, receive equipment, supplies or materials, or otherwise provide our services in a timely manner or at a reasonable price. In addition, labor shortages may affect our ability to achieve our staffing or productivity goals.
These challenges may affect our ability to transport specimens, receive equipment, supplies or materials, or otherwise provide our services in a timely manner or at a reasonable price.
Competitors may compete using advanced technology, including technology that enables more convenient or cost-effective testing. Digital pathology, still in an emerging state, is an example of this. Competitors also may compete on the basis of new service offerings.
Competitors may compete using advanced technology, including technology that enables more convenient or cost-effective testing ( e.g. , technology enabled by AI). Digital pathology is an example of this. Competitors also may compete on the basis of new service offerings.
We are subject to laws and regulations regarding protecting the security and privacy of certain healthcare and personal information, including: (a) the federal Health Insurance Portability and Accountability Act and the regulations thereunder, which establish (i) a complex regulatory framework including requirements for safeguarding protected health information and (ii) comprehensive federal standards regarding the uses and disclosures of protected health information; (b) state laws ( e.g. , California) and similar laws in other states; and (c) laws outside the United States, including the European Union's General Data Protection Regulation and similar laws in other jurisdictions. 35 Table of Contents Our approach to environmental, social and governance (ESG) matters may not satisfy all our stakeholders.
We are subject to laws and regulations regarding protecting the security and privacy of certain healthcare and personal information, including: (a) the federal Health Insurance Portability and Accountability Act and the regulations thereunder, which establish (i) a complex regulatory framework including requirements for safeguarding protected health information and (ii) comprehensive federal standards regarding the uses and disclosures of protected health information; (b) state laws ( e.g. , California) and similar laws in other states; and (c) laws outside the United States, including the European Union's General Data Protection Regulation, Canada’s Personal Information Protection and Electronic Documents Act and provincial health privacy laws, and similar laws in other jurisdictions.
RISKS RELATED TO CHANGE IN PUBLIC POLICY AND THE REGULATORY AND LEGAL ENVIRONMENT We are subject to numerous legal and regulatory requirements governing our activities, and we may face substantial fines and penalties, and our business activities may be impacted, if we fail to comply.
We are subject to numerous legal and regulatory requirements governing our activities, and we may face substantial fines and penalties, and our business activities may be impacted, if we fail to comply.
Unfortunately, as a result of a flawed implementation of PAMA, the data collected did not accurately represent the laboratory market as required under PAMA. Independent laboratories were overrepresented, and hospitals and physician office laboratories were underrepresented, making the first round of PAMA cuts too extreme and resulting in below market rates.
Unfortunately, as a result of a flawed implementation of PAMA, the data collected did not accurately represent the laboratory market as required under PAMA. Independent laboratories were overrepresented, and hospitals and physician office laboratories were underrepresented, making the first round of PAMA cuts too extreme. The three years of cuts exceeded the original 10-year savings projections.
As a result of this affiliation between hospitals and community clinicians, we compete against hospital-affiliated laboratories primarily based on quality and scope of service as well as pricing. In addition, hospitals that own physician practices may encourage or require the practices to refer testing to the hospital's laboratory.
Hospitals may seek to leverage their relationships with community clinicians and encourage the clinicians to send their outreach testing to the hospital's laboratory. As a result of this affiliation between hospitals and community clinicians, we compete against hospital-affiliated laboratories primarily based on quality and scope of service as well as pricing.
If either the rule or legislation were to become law, it could have a significant impact on the clinical laboratory testing industry, including regulating LDTs in new ways, while creating new avenues of opportunity and competition regarding clinical laboratory testing. New competitors may enter the industry, and competition may come in new forms.
The current FDA policy to remove enforcement discretion and/or new legislation is expected to have a significant impact on the clinical laboratory testing industry, including regulating LDTs in new ways, while creating new avenues of opportunity and competition regarding clinical laboratory testing. New competitors may enter the industry, and competition may come in new forms.
(c) A decline in economic conditions, including the impact of an inflationary environment. 38 Table of Contents (d) Impact of changes in payment mix, including increased patient financial responsibility and any shift from fee-for-service to discounted, capitated or bundled fee arrangements.
(b) Increased pricing pressure from customers, including payers and patients, and changing relationships with customers, payers, suppliers or strategic partners. (c) A decline in economic conditions, including the impact of an inflationary environment. (d) Impact of changes in payment mix, including increased patient financial responsibility and any shift from fee-for-service to discounted, risk-sharing, capitated or bundled fee arrangements.
Although the Company has robust security measures implemented, which are monitored and routinely tested both by internal resources and external parties, cybersecurity threats against us continue to evolve and may not be recognized until after an incident.
Also, an increasing risk of civil unrest, political tensions, wars or other military conflicts may also impact the cybersecurity threat risk landscape. 36 Table of Contents Although the Company has robust security measures implemented, which are monitored and routinely tested both by internal resources and external parties, cybersecurity threats against us continue to evolve and may not be recognized until after an incident.
The extent to which we may be impacted by future public health emergencies and pandemics will depend on many factors beyond our knowledge or control.
In addition, labor shortages may affect our ability to achieve our staffing or productivity goals. 38 Table of Contents The extent to which we may be impacted by future public health emergencies and pandemics will depend on many factors beyond our knowledge or control.
(i) Denial, suspension or revocation of CLIA certification or other licenses for any of our clinical laboratories under the CLIA standards, revocation or suspension of the right to bill the Medicare and Medicaid programs or other adverse regulatory actions by federal, state and local agencies.
(h) Failure to efficiently integrate acquired businesses and to manage the costs related to any such integration, or to retain key technical, professional or management personnel. 39 Table of Contents (i) Denial, suspension or revocation of CLIA certification or other licenses for any of our clinical laboratories under the CLIA standards, revocation or suspension of the right to bill the Medicare and Medicaid programs or other adverse regulatory actions by federal, state and local agencies.
In recent years, there has been a trend of hospitals acquiring physician practices, increasing the percentage of physician practices owned by hospitals. Increased hospital ownership of physician practices may enhance clinician ties to hospital-affiliated laboratories and may strengthen their competitive position.
There has been a trend of hospitals acquiring physician practices, increasing the percentage of physician practices owned by hospitals. Increased hospital ownership of physician practices may enhance clinician ties to hospital-affiliated laboratories, even encouraging or requiring the practices they own to refer testing to the hospital's laboratory, strengthening their competitive position further.
Our IT systems have been and are subject to potential cyberattacks, tampering or other security breaches.
The IT systems that we rely on may be subject to unauthorized tampering, cyberattack or other security breach. Our IT systems have been and are subject to potential cyberattacks, tampering or other security breaches.
Steps to reduce utilization and reimbursement also discourage innovation and access to innovative solutions that we may offer. Health plans and other third parties have taken steps to reduce the utilization and reimbursement of health services, including clinical testing services. We face efforts by non-governmental third-party payers, including health plans, to reduce utilization of and reimbursement for clinical testing services.
Health plans and other third parties have taken steps to reduce the utilization and reimbursement of health services, including clinical testing services. We face efforts by non-governmental third-party payers, including health plans, to reduce utilization of and reimbursement for clinical testing services. Examples include increased use of prior authorization requirements and increased denial of coverage for services.
Moreover, the success of any such effort may be affected by a number of factors, including our ability to properly assess and value the potential business opportunity, and to integrate it into our business.
Moreover, the success of any such effort may be affected by a number of factors, including our ability to properly assess and value the potential business 37 Table of Contents opportunity, and to integrate the new businesses, manage the costs related to any such integration and to retain key technical, professional or management personnel.
These issues can also arise as a result of failures by third parties with whom we do business and over which we have limited control. Any disruption or failure of our IT systems could have a material impact on our ability to serve our customers and patients, including negatively affecting our reputation in the marketplace.
Any disruption or failure of our IT systems, including in connection with Project Nova, could have a material impact on our ability to serve our customers and patients, including negatively affecting our reputation in the marketplace, or otherwise adversely impact our business.
We are subject to numerous political (including geopolitical), legal, operational and other risks as a result of our international operations which could impact our business in many ways.
Legislative provisions relating to healthcare fraud and abuse provide government enforcement personnel with substantial funding, powers, penalties and remedies to pursue suspected cases of fraud and abuse. 33 Table of Contents We are subject to numerous political (including geopolitical), legal, operational and other risks as a result of our international operations which could impact our business in many ways.
These initiatives have included coinsurance for clinical testing services, co-payments for clinical testing and further laboratory physician fee schedule reductions. Other steps taken to reduce utilization and reimbursement include requirements to obtain diagnosis codes to obtain payment, increased documentation requirements, limiting the allowable number of tests or ordering frequency, expanded prior authorization programs and otherwise increasing payment denials.
Other steps taken to reduce utilization and reimbursement include requirements to obtain diagnosis codes to obtain payment, increased documentation requirements, limiting the allowable number of tests or ordering frequency, expanded prior authorization programs and otherwise increasing payment denials. Steps to reduce utilization and reimbursement also discourage innovation and access to innovative solutions that we may offer.
Inflationary pressures have resulted in increases in the costs of the testing equipment, supplies and other goods and services that we purchase from manufacturers, suppliers and others. Inflationary pressures, along with the competition for labor, have also resulted in a rise of our labor costs, which include the costs of compensation, benefits, and recruiting and training new hires.
Inflationary pressures over the last number of years have resulted in increases in the costs of the testing equipment, supplies and other goods and services that we purchase from manufacturers, suppliers and others.
RISKS RELATED TO OUR OPERATIONS The development of new technologies is rapidly changing diagnostic testing, which will impact the healthcare industry and the competitive environment.
As a result, we would be more vulnerable to general adverse economic, industry and capital markets conditions as well as the other risks associated with indebtedness. 34 Table of Contents RISKS RELATED TO OUR OPERATIONS The development of new technologies is rapidly changing diagnostic testing, which will impact the healthcare industry and the competitive environment.
Hospitals generally maintain on-site laboratories to perform testing on their patients (inpatient or outpatient). In addition, many hospitals compete with commercial clinical laboratories for outreach (non-hospital patients) testing. Hospitals may seek to leverage their relationships with community clinicians and encourage the clinicians to send their outreach testing to the hospital's laboratory.
Hospitals and companies that directly or indirectly employ or manage physicians also present a competitive threat to our business. Hospitals generally maintain on-site laboratories to perform testing on their patients (inpatient or outpatient). In addition, many hospitals compete with commercial clinical laboratories for outreach (non-hospital patients) testing.
These proceedings also may result in substantial monetary damages. RISKS RELATED TO OUR INDEBTEDNESS Our outstanding debt may impair our financial and operating flexibility. As of December 31, 2023, we had approximately $4.7 billion of debt outstanding. Other than credit facilities in the normal course of business, we do not have any off-balance sheet financing arrangements in place or available.
These proceedings also may result in substantial monetary damages and reputational harm. RISKS RELATED TO OUR INDEBTEDNESS Our outstanding debt may impair our financial and operating flexibility. As of December 31, 2024, we had approximately $6.2 billion of debt outstanding.
We also may be unable to continue to negotiate acceptable licensing arrangements, and arrangements that we do conclude may not yield commercially successful clinical tests. If we are unable to license these testing methods at competitive rates, our research and development costs may increase as a result.
We also may be unable to continue to negotiate acceptable licensing arrangements, and licensing arrangements that we do enter into may not yield commercially successful clinical tests.
In that case, it may be more difficult, or we may be unable, to obtain financing on terms that are acceptable to us. As a result, we would be more vulnerable to general adverse economic, industry and capital markets conditions as well as the other risks associated with indebtedness.
In that case, it may be more difficult, or we may be unable, to obtain financing on terms that are acceptable to us.
This could lead to negative perceptions of, or loss of support for our business, difficulty recruiting or attracting new employees and our stock price being negatively impacted. The IT systems that we rely on may be subject to unauthorized tampering, cyberattack or other security breach.
Additionally, certain of our stakeholders may not be satisfied with our decisions related to corporate responsibility matters, the goals we set, our progress towards these goals or the resulting outcomes. This could lead to negative perceptions of, or loss of support for, our business, difficulty recruiting or attracting new employees and our stock price being negatively impacted.
We regularly assess opportunities and risks related to environmental, social and governance (ESG) matters. As part of this process, we make decisions related to ESG matters and may set goals and targets related to ESG matters. We have a broad range of stakeholders, including our stockholders, employees, patients and communities we serve, some of whom increasingly focus on ESG matters.
Our approach to corporate responsibility may not satisfy all our stakeholders. We regularly assess opportunities and risks related to corporate responsibility, which includes sustainability, social and governance matters. As part of this process, we make decisions related to these matters and may set goals and targets related to sustainability and social matters.
In addition, some of our stockholders, employees and patients may consider ESG factors in making investment, employment and service provider decisions. Our ability to achieve the goals we may set related to ESG matters are subject to numerous risks and uncertainties, many of which are outside of our control.
Our ability to achieve the goals we may set related to corporate responsibility matters are subject to numerous risks and uncertainties, many of which are outside of our control. Despite our efforts, we may not achieve our goals on the timetable we set or at all.
We believe that federal and state governments continue aggressive enforcement efforts against perceived healthcare fraud. Legislative provisions relating to healthcare fraud and abuse provide government enforcement personnel with substantial funding, powers, penalties and remedies to pursue suspected cases of fraud and abuse.
We believe that federal and state governments continue aggressive enforcement efforts against perceived healthcare fraud.
Our ability to raise the prices and fees we charge for the services we provide is limited. Continuation of the current inflationary environment may adversely impact us. CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS Some statements and disclosures in this document are forward-looking statements.
CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS Some statements and disclosures in this document are forward-looking statements.
PAMA calls for further revision of the Medicare CLFS for years after 2020, based on future surveys of market rates.
PAMA calls for further revision of the Medicare CLFS for years after 2020, based on future surveys of market rates. Congress has delayed cuts five times (2021 - 2025) and delayed 2019 reporting six times (2020 - 2025). Reimbursement rate reduction from 2026-28 is capped by PAMA at 15% annually.
The FDA has claimed regulatory authority over all LDTs, but has stated that it exercised enforcement discretion with regard to most LDTs performed by high complexity CLIA-certified laboratories. 32 Table of Contents As the FDA moves to regulate more clinical laboratory testing, its approach to regulation is expected to impact industry practices and participants, new competitors may enter the industry, and competition may come in new forms.
The FDA's regulation of clinical laboratory testing is expected to impact industry practices and participants, new competitors may enter the industry, and competition may come in new forms.
Removed
In addition, we believe that clinical testing market fundamentals are changing. Pursuant to PAMA, reimbursement rates for many clinical laboratory tests provided under Medicare were reduced during 2018 - 2020. Unfortunately, as a result of a flawed implementation of PAMA, the data collected did not accurately represent the laboratory market as required under PAMA.
Added
In addition, we believe that clinical testing market fundamentals are changing. The regulatory environment related to reimbursement rates for clinical laboratory tests under Medicare are in flux and we also believe that health plans and consumers increasingly are focusing on driving better value in laboratory testing services.
Removed
Independent laboratories were overrepresented, and hospitals and physician office laboratories were underrepresented, making the first round of PAMA cuts too extreme and resulting in below market rates. Congress reintroduced federal legislation in 2023 (the Saving Access to Laboratory Services Act), which, if enacted, would reform PAMA and create a true market-based CLFS.
Added
Congress also periodically considers cost-saving initiatives, which have included coinsurance for clinical testing services, co-payments for clinical testing and further laboratory physician fee schedule reductions.
Removed
PAMA's next data collection and reporting period have been delayed, most recently by federal legislation adopted in November 2023 (the Further Continuing Appropriations and Other Extensions Act of 2024), which further delayed the reimbursement rate reductions and reporting requirements until January 1, 2025; reimbursement rate reduction from 2025-2027 is capped by PAMA at 15% annually.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed16 unchanged
Biggest changeGovernance The Company’s Chief Information Security Officer (CISO), in coordination with the Company’s Chief Litigation Officer, Executive Director, Privacy Officer, Corporate Controller/Chief Accounting Officer and other internal stakeholders, is responsible for leading the team responsible for assessing, identifying and managing cybersecurity and data privacy risks, including implementation of our cybersecurity risk management program.
Biggest changeGovernance The Company’s Chief Information Security Officer (CISO), in coordination with the Company’s Chief Litigation Officer, Executive Director, Privacy Officer, Corporate Controller/Chief Accounting Officer, Executive Director, Corporate Security and other internal stakeholders, is responsible for leading the team responsible for assessing, identifying and managing cybersecurity and data privacy risks, including implementation of our cybersecurity risk management program.
Although no cybersecurity incident during the year ended December 31, 2023 resulted in an interruption of our operations, known losses of critical data or otherwise had a material impact on our strategy, financial condition or results of operations, the scope of any future incident cannot be predicted. See “Item 1A. Risk Factors” for more information.
Although no cybersecurity incident during the year ended December 31, 2024 resulted in an interruption of our operations, known losses of critical data or otherwise had a material impact on our strategy, financial condition or results of operations, the scope of any future incident cannot be predicted. See “Item 1A. Risk Factors” for more information.
The Cybersecurity Committee regularly reports on its activities to the Board to promote effective coordination and to ensure the entire Board remains apprised of the effectiveness of our cybersecurity risk management and our cybersecurity risk landscape, and also assesses how management is managing these risks. 41 Table of Contents
The Cybersecurity Committee regularly reports on its activities to the Board to promote effective coordination and to ensure the entire Board remains apprised of the effectiveness of our cybersecurity risk management and our cybersecurity risk landscape, and also assesses how management is managing these risks. 42 Table of Contents
Our cybersecurity program is based on multiple security frameworks, including the National Institute of Standards and Technology’s NIST 800 Special Publication Information Security standard, MITRE 40 Table of Contents ATT&CK Framework, the Payment Card Industry Data Security Standard, the System and Organization Controls for Service Organizations 2 (SOC 2), and ISO 9001:2015 and ISO 15189.
Our cybersecurity program is based on multiple security frameworks, including the National Institute of Standards and Technology’s NIST 800 Special Publication Information Security standard, MITRE ATT&CK Framework, the Payment Card Industry Data Security Standard, the System and Organization Controls for Service Organizations 2 (SOC 2), and ISO 9001:2015 and ISO 15189.
The CISO has extensive experience working in the IT and services industry and is a subject matter expert in varied topics including cybersecurity, data integrity, IT risk, enterprise architecture, third-party risk, threat intelligence, incident response, and regulatory compliance.
The CISO has extensive experience working in the IT and services industry and is a subject matter expert in varied topics including cybersecurity, data integrity, IT risk, enterprise architecture, third-party risk, threat intelligence, incident response, and 41 Table of Contents regulatory compliance.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed3 unchanged
Biggest changeLocation Leased or Owned 3600 Northgate Blvd., Sacramento, California 95834 (laboratory) Leased 8401 Fallbrook Avenue, West Hills, California 91304 (laboratory) Leased 33608 Ortega Hwy., San Juan Capistrano, California 92675 (laboratory) Owned 4151C East Fowler Avenue, Tampa, Florida 33617 (laboratory) Owned 1777 Montreal Circle, Tucker, Georgia 30084-6802 (laboratory) Owned 506 E State Parkway, Schaumburg, Illinois 60173 (laboratory) Owned 1355 Mittle Blvd., Wood Dale, Illinois 60191 (laboratory) Leased 200 Forest Street, Marlborough, Massachusetts 01752 (laboratories) Leased 4770 Regent Blvd., Irving, Texas 75063 (laboratory) Leased 14225 Newbrook Drive, Chantilly, Virginia 22021 (laboratory) Leased 10101 Renner Blvd., Lenexa, Kansas 66219 (laboratory) Owned 4380 Federal Drive, Greensboro, North Carolina 27410 (laboratory) Leased 2501 South State Hwy 121, Lewisville, Texas 75067 (laboratory) Leased 6700 Euclid Avenue, Cleveland, Ohio 44103 (laboratory) Leased One Insights Drive, Clifton, NJ 07012 (laboratory) Owned
Biggest changeLocation Leased or Owned 3600 Northgate Blvd., Sacramento, California 95834 (laboratory) Leased 8401 Fallbrook Avenue, West Hills, California 91304 (laboratory) Leased 33608 Ortega Hwy., San Juan Capistrano, California 92675 (laboratory) Owned 4151C East Fowler Avenue, Tampa, Florida 33617 (laboratory) Owned 1777 Montreal Circle, Tucker, Georgia 30084-6802 (laboratory) Owned 506 E State Parkway, Schaumburg, Illinois 60173 (laboratory) Owned 1355 Mittle Blvd., Wood Dale, Illinois 60191 (laboratory) Leased 200 Forest Street, Marlborough, Massachusetts 01752 (laboratories) Leased 4770 Regent Blvd., Irving, Texas 75063 (laboratory) Leased 14225 Newbrook Drive, Chantilly, Virginia 22021 (laboratory) Leased 10101 Renner Blvd., Lenexa, Kansas 66219 (laboratory) Owned 4380 Federal Drive, Greensboro, North Carolina 27410 (laboratory) Leased 2501 South State Hwy 121, Lewisville, Texas 75067 (laboratory) Leased 6700 Euclid Avenue, Cleveland, Ohio 44103 (laboratory) Leased One Insights Drive, Clifton, NJ 07012 (laboratory) Owned 100 International Boulevard, Toronto, Ontario, M9W 6J6, Canada (laboratory) Owned 3680 Gilmore Way Burnaby, British Columbia, Canada (laboratory) Owned 6560 Kennedy Road, Mississauga, Ontario, L5T 2X4, Canada (laboratory) Leased
In addition, we maintain offices, patient service centers and clinical laboratories in locations outside the United States, including in Finland, Puerto Rico and Mexico. Our properties that are not owned are leased on terms and for durations that are reflective of commercial standards in the communities where these properties are located.
In addition, we maintain offices, patient service centers and clinical laboratories in locations outside the United States, including in Canada, Finland, Puerto Rico and Mexico. Our properties that are not owned are leased on terms and for durations that are reflective of commercial standards in the communities where these properties are located.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2023 – October 31, 2023 Share Repurchase Program (A) — $ — — $ — Employee Transactions (B) — $ — N/A N/A November 1, 2023 – November 30, 2023 Share Repurchase Program (A) 1,282,448 $ 134.54 1,282,448 $ 1,138,363 Employee Transactions (B) 428 $ 134.69 N/A N/A December 1, 2023 – December 31, 2023 Share Repurchase Program (A) 748,913 $ 138.35 748,913 $ 1,035,913 Employee Transactions (B) — $ — N/A N/A Total Share Repurchase Program (A) 2,031,361 $ 135.95 2,031,361 $ 1,035,913 Employee Transactions (B) 428 $ 134.69 N/A N/A (A) In February 2023, our Board of Directors increased the size of our share repurchase program by $1 billion.
Biggest changeISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) October 1, 2024 – October 31, 2024 Share Repurchase Program (A) 96,210 $ 155.90 96,210 $ 1,020,914 Employee Transactions (B) — $ — N/A N/A November 1, 2024 – November 30, 2024 Share Repurchase Program (A) 556,579 $ 159.62 556,579 $ 932,073 Employee Transactions (B) 689 $ 160.58 N/A N/A December 1, 2024 – December 31, 2024 Share Repurchase Program (A) 290,587 $ 158.85 290,587 $ 885,914 Employee Transactions (B) — $ — N/A N/A Total Share Repurchase Program (A) 943,376 $ 159.00 943,376 $ 885,914 Employee Transactions (B) 689 $ 160.58 N/A N/A (A) Since the share repurchase program's inception in May 2003, our Board of Directors has authorized $13 billion of share repurchases of our common stock.
(B) Includes: (1) shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by holders of stock options (granted under the Company's Amended and Restated Employee Long-Term Incentive Plan) who exercised options; and (2) shares withheld (under the terms of grants under the Amended and Restated Employee Long-Term Incentive Plan) to offset tax withholding obligations that occur upon the delivery of outstanding common shares underlying restricted share units and performance share units. 43 Table of Contents Performance Graph Set forth below is a line graph comparing the cumulative total shareholder return on Quest Diagnostics' common stock since December 31, 2018 based on the market price of the Company's common stock and assuming reinvestment of dividends, with the cumulative total shareholder return of companies on the Standard & Poor's (S&P) 500 Stock Index and the S&P 500 Health Care (Sector) Index.
(B) Includes: (1) shares delivered or attested to in satisfaction of the exercise price and/or tax withholding obligations by holders of stock options (granted under the Company's Amended and Restated Employee Long-Term Incentive Plan) who exercised options; and (2) shares withheld (under the terms of grants under the Amended and Restated Employee Long-Term Incentive Plan) to offset tax withholding obligations that occur upon the delivery of outstanding common shares underlying restricted share units and performance share units. 44 Table of Contents Performance Graph Set forth below is a line graph comparing the cumulative total shareholder return on Quest Diagnostics' common stock since December 31, 2019 based on the market price of the Company's common stock and assuming reinvestment of dividends, with the cumulative total shareholder return of companies on the Standard & Poor's (S&P) 500 Stock Index and the S&P 500 Health Care (Sector) Index.
The table below sets forth the information with respect to purchases made by or on behalf of the Company of its common stock during the fourth quarter of 2023.
The table below sets forth the information with respect to purchases made by or on behalf of the Company of its common stock during the fourth quarter of 2024.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed and traded on the New York Stock Exchange under the symbol “DGX.” As of February 1, 2024, we had approximately 2,110 record holders of our common stock; we believe that the number of beneficial holders of our common stock exceeds the number of record holders.
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed and traded on the New York Stock Exchange under the symbol “DGX.” As of January 31, 2025, we had approximately 1,991 record holders of our common stock; we believe that the number of beneficial holders of our common stock exceeds the number of record holders.
Closing DGX Price Total Shareholder Return Performance Graph Values Date DGX S&P 500 S&P 500 Health Care (Sector) DGX S&P 500 S&P 500 Health Care (Sector) 12/31/2019 $ 106.79 31.15 % 31.49 % 20.82 % $ 131.15 $ 131.49 $ 120.82 12/31/2020 $ 119.17 14.04 % 18.40 % 13.45 % $ 149.56 $ 155.68 $ 137.07 12/31/2021 $ 173.01 47.86 % 28.71 % 26.13 % $ 221.13 $ 200.37 $ 172.89 12/30/2022 $ 156.44 (7.79) % (18.13) % (1.95) % $ 203.90 $ 164.04 $ 169.52 12/29/2023 $ 137.88 (10.05) % 26.29 % 2.06 % $ 183.41 $ 207.16 $ 173.00 Item 6 [Reserved]
Closing DGX Price Total Shareholder Return Performance Graph Values Date DGX S&P 500 S&P 500 Health Care (Sector) DGX S&P 500 S&P 500 Health Care (Sector) 12/31/2020 $ 119.17 14.04 % 18.40 % 13.45 % $ 114.04 $ 118.40 $ 113.45 12/31/2021 $ 173.01 47.86 % 28.71 % 26.13 % $ 168.61 $ 152.39 $ 143.09 12/30/2022 $ 156.44 (7.79) % (18.13) % (1.95) % $ 155.47 $ 124.76 $ 140.30 12/29/2023 $ 137.88 (10.05) % 26.29 % 2.06 % $ 139.85 $ 157.56 $ 143.19 12/31/2024 $ 150.86 11.77 % 25.02 % 2.58 % $ 156.31 $ 196.98 $ 146.88 Item 6 [Reserved]
Removed
As of December 31, 2023, $1.0 billion remained available under our share repurchase authorization. Since the share repurchase program's inception in May 2003, our Board of Directors has authorized $13 billion of share repurchases of our common stock. The share repurchase authorization has no set expiration or termination date.
Added
The share repurchase authorization has no set expiration or termination date.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeItem 7. Management's Discussion and Analysis of Financial Condition and Results of Operations See page 57 . 44 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk See Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 8. Financial Statements and Supplementary Data See Item 15(a)1 and Item 15(a)2. Item 9.
Biggest changeItem 7. Management's Discussion and Analysis of Financial Condition and Results of Operations See page 58 . 45 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk See Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 8. Financial Statements and Supplementary Data See Item 15(a)1 and Item 15(a)2. Item 9.

Other DGX 10-K year-over-year comparisons