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What changed in Quest Diagnostics's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Quest Diagnostics's 2022 and 2023 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 2023 report.

+410 added−396 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-21)

Top changes in Quest Diagnostics's 2023 10-K

410 paragraphs added · 396 removed · 338 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

244 edited+52 added−49 removed236 unchanged
Biggest changeResults of Operations The following table sets forth certain results of operations data for the periods presented: 2022 2021 $ Change % Change (dollars in millions, except per share data) Net revenues: DIS business $ 9,609 $ 10,494 $ (885) (8.4) % DS businesses 274 294 (20) (7.0) Total net revenues $ 9,883 $ 10,788 $ (905) (8.4) % Operating costs and expenses and other operating income: Cost of services $ 6,450 $ 6,579 $ (129) (2.0) % Selling, general and administrative 1,874 1,727 147 8.5 Amortization of intangible assets 120 103 17 15.6 Other operating expense (income), net 11 (2) 13 NM Total operating costs and expenses, net $ 8,455 $ 8,407 $ 48 0.6 % Operating income $ 1,428 $ 2,381 $ (953) (40.0) % 65 Table of Contents Other income (expense): Interest expense, net $ (138) $ (151) $ 13 (8.6) % Other (expense) income, net (55) 369 (424) NM Total non-operating (expense) income, net $ (193) $ 218 $ (411) NM Income tax expense $ (264) $ (597) $ 333 (55.8) % Effective income tax rate 21.4 % 23.0 % Equity in earnings of equity method investees, net of taxes $ 44 $ 78 $ (34) (44.7) % Net income attributable to Quest Diagnostics $ 946 $ 1,995 $ (1,049) (52.6) % Diluted earnings per share attributable to Quest Diagnostics’ common stockholders $ 7.97 $ 15.55 $ (7.58) (48.7) % NM - Not Meaningful The following table sets forth certain results of operations data as a percentage of net revenues for the periods presented: 2022 2021 Net revenues: DIS business 97.2 % 97.3 % DS businesses 2.8 2.7 Total net revenues 100.0 % 100.0 % Operating costs and expenses and other operating income: Cost of services 65.3 % 61.0 % Selling, general and administrative 19.0 16.0 Amortization of intangible assets 1.1 1.0 Other operating expense (income), net 0.1 (0.1) Total operating costs and expenses, net 85.5 % 77.9 % Operating income 14.5 % 22.1 % Operating Results Results for the year ended December 31, 2022 were affected by certain items that on a net basis decreased diluted earnings per share by $1.98 as follows: • pre-tax amortization expense of $120 million recorded in amortization of intangible assets or $0.74 per diluted share; • pre-tax charges of $93 million recorded in selling, general and administrative expenses, or $0.59 per diluted share, representing costs associated with donations, contributions and other financial support through Quest for Health Equity (our initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities); • pre-tax charges of $88 million ($32 million recorded in cost of services and $56 million recorded in selling, general and administrative expenses), or $0.56 per diluted share, primarily associated with workforce reductions, systems conversions and integration incurred in connection with further restructuring and integrating our business; • pre-tax charges of $42 million ($30 million recorded in other (expense) income, net, and $12 million recorded in equity in earnings of equity method investees), or $0.26 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments ; and 66 Table of Contents • net pre-tax charges of $13 million ($2 million recorded in cost of services and $11 million recorded in other operating expense (income), net), or $0.09 per diluted share, primarily representing a $14 million impairment charge on certain property, plant and equipment and a $5 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions, partially offset by a $10 million gain from a payroll tax credit under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") associated with the retention of employees; partially offset by • an income tax benefit of $18 million, recorded in income tax expense, or $0.14 per diluted share, due to a cumulative adjustment to state deferred tax liabilities related to depreciation expense; and • excess tax benefits associated with stock-based compensation arrangements of $14 million, or $0.12 per diluted share, recorded in income tax expense.
Biggest changeResults for the year ended December 31, 2022 were affected by certain items that on a net basis decreased diluted earnings per share by $1.98 as follows: • pre-tax amortization expense of $120 million recorded in amortization of intangible assets or $0.74 per diluted share; • pre-tax charges of $93 million recorded in selling, general and administrative expenses, or $0.59 per diluted share, representing costs associated with donations, contributions and other financial support through Quest for Health Equity (our initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities); • pre-tax charges of $88 million ($32 million recorded in cost of services and $56 million recorded in selling, general and administrative expenses), or $0.56 per diluted share, primarily associated with workforce reductions, systems conversions and integration incurred in connection with further restructuring and integrating our business; • pre-tax charges of $42 million ($30 million recorded in other income (expense), net, and $12 million recorded in equity in earnings of equity method investees, net of tax), or $0.26 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments ; and • net pre-tax charges of $13 million ($2 million recorded in cost of services and $11 million recorded in other operating expense (income), net), or $0.09 per diluted share, primarily representing a $14 million impairment charge on certain property, plant and equipment and a $5 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions, partially offset by a $10 million gain from a payroll tax credit under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") associated with the retention of employees; partially offset by • an income tax benefit of $18 million, recorded in income tax expense, or $0.14 per diluted share, due to a cumulative adjustment to state deferred tax liabilities related to depreciation expense; and • excess tax benefits associated with stock-based compensation arrangements of $14 million, or $0.12 per diluted share, recorded in income tax expense.
We estimate the amount of consideration we expect to be entitled to receive from customer groups in exchange for providing services using the portfolio approach. These estimates include the impact of contractual allowances (including payer denials), and patient price concessions, as discussed below.
We estimate the amount of consideration we expect to be entitled to receive from payer customer groups in exchange for providing services using the portfolio approach. These estimates include the impact of contractual allowances (including payer denials), and patient price concessions, as discussed below.
The changes in the value of our deferred compensation obligations is largely offset by changes in the value of the associated investments, which are recorded in other (expense) income, net. For further details regarding our deferred compensation plans, see Note 18 to the audited consolidated financial statements.
The changes in the value of our deferred compensation obligations is largely offset by changes in the value of the associated investments, which are recorded in other income (expense), net. For further details regarding our deferred compensation plans, see Note 18 to the audited consolidated financial statements.
For the year ended December 31, 2022, other (expense) income, net included $30 million of losses associated with changes in the carrying value of our strategic investments and $25 million of losses associated with investments in our deferred compensation plans.
For the year ended December 31, 2022, other income (expense), net included $30 million of losses associated with changes in the carrying value of our strategic investments and $25 million of losses associated with investments in our deferred compensation plans.
For a derivative instrument that has been formally designated as a fair value hedge, fair value gains or losses on the derivative instrument along with offsetting fair value gains or losses on the hedged item that are attributable to the risk being hedged are reported in other (expense) income, net in the consolidated statements of operations.
For a derivative instrument that has been formally designated as a fair value hedge, fair value gains or losses on the derivative instrument along with offsetting fair value gains or losses on the hedged item that are attributable to the risk being hedged are reported in other income (expense), net in the consolidated statements of operations.
The Company estimates the amount of consideration it expects to be entitled to receive from customer groups in exchange for providing services using the portfolio approach. These estimates include the impact of contractual allowances (including payer denials), and patient price concessions, as discussed below.
The Company estimates the amount of consideration it expects to be entitled to receive from payer customer groups in exchange for providing services using the portfolio approach. These estimates include the impact of contractual allowances (including payer denials), and patient price concessions, as discussed below.
Acquisition of the outreach laboratory services business of Mercy Health On June 1, 2021, the Company completed the acquisition of the outreach laboratory services business of Mercy Health ("Mercy Health"), which serves providers and patients in Arkansas, Kansas, Missouri and Oklahoma, in an all-cash transaction for $225 million.
Acquisition of the outreach laboratory services business of Mercy Health On June 1, 2021, the Company completed the acquisition of the outreach laboratory services business of Mercy Health, which serves providers and patients in Arkansas, Kansas, Missouri and Oklahoma, in an all-cash transaction for $225 million.
As a result of the transaction, during the year ended December 31, 2021, the Company recorded a $314 million pre-tax gain in other (expense) income, net in the consolidated statement of operations based on the difference between the net sales proceeds and the carrying value of the investment, including $20 million of cumulative translation losses which were previously recorded in accumulated other comprehensive loss.
As a result of the transaction, during the year ended December 31, 2021, the Company recorded a $314 million pre-tax gain in other income (expense), net in the consolidated statement of operations based on the difference between the net sales proceeds and the carrying value of the investment, including $20 million of cumulative translation losses which were previously recorded in accumulated other comprehensive loss.
F-34 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) Changes in Accumulated Other Comprehensive Loss by Component Comprehensive income (loss) includes: • Foreign currency translation adjustments; • Net deferred gains (losses) on cash flow hedges, which represent deferred gains (losses), net of tax, on interest rate-related derivative financial instruments designated as cash flow hedges, net of amounts reclassified to interest expense (see Note 16); and • Net changes in available-for-sale debt securities, which represent unrealized holding gains (losses), net of tax, on available-for-sale debt securities.
Changes in Accumulated Other Comprehensive Loss by Component Comprehensive income (loss) includes: • Foreign currency translation adjustments; F-34 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) • Net deferred gains (losses) on cash flow hedges, which represent deferred gains (losses), net of tax, on interest rate-related derivative financial instruments designated as cash flow hedges, net of amounts reclassified to interest expense (see Note 16); and • Net changes in available-for-sale debt securities, which represent unrealized holding gains (losses), net of tax, on available-for-sale debt securities.
As a result of the transaction, during the year ended December 31, 2021, $20 million of cumulative translation losses were reclassified from accumulated other comprehensive loss to other (expense) income, net. See Note 7 for further details.
As a result of the transaction, during the year ended December 31, 2021, $20 million of cumulative translation losses were reclassified from accumulated other comprehensive loss to other income (expense), net. See Note 7 for further details.
Quest Diagnostics Incorporated The Company is subject to a putative class action entitled Cole, et al. v Quest Diagnostics Incorporated , which was filed in the U. S.
The Company is subject to a putative class action entitled Cole, et al. v Quest Diagnostics Incorporated , which was filed in the U. S.
For the year ended December 31, 2022, other operating expense (income), net includes a $14 million impairment charge on certain property, plant and equipment and a $5 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions, partially offset by a $10 million gain from a payroll tax credit under the CARES Act associated with the retention of employees.
For the year ended December 31, 2022, other operating expense, net includes a $14 million impairment charge on certain property, plant and equipment and a $5 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions, partially offset by a $10 million gain from a payroll tax credit under the CARES Act associated with the retention of employees.
The Company has insurance coverage rights in place (limited in amount; subject to deductible) for certain potential costs and liabilities related to these proceedings and investigations. 401(k) Plan Lawsuit In 2020, two putative class action lawsuits were filed in the U.S. District Court for New Jersey against the Company and other defendants with respect to the Company’s 401(k) plan.
The Company has insurance coverage rights in place (limited in amount; subject to deductible) for certain potential costs and liabilities related to these proceedings and investigations. In 2020, two putative class action lawsuits were filed in the U.S. District Court for New Jersey against the Company and other defendants with respect to the Company’s 401(k) plan.
See Note 8 for a discussion of the fair value of such investments. • Equity investments that do not have readily determinable fair values, which consist of investments in preferred and common shares of privately held companies. These investments are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes.
See Note 8 for a discussion of the fair value of such investments. • Equity investments that do not have readily determinable fair values consist of investments in preferred and common shares of privately held companies. These investments are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes.
Acquisition of assets of Labtech Diagnostics, LLC On December 13, 2021, the Company completed the acquisition of assets of Labtech Diagnostics, LLC ("Labtech"), an independent clinical diagnostic laboratory provider serving physicians and patients primarily in South Carolina, North Carolina, Florida and Georgia, in an all cash transaction for $95 million, which consisted of cash consideration of $80 million and contingent consideration estimated at $15 million.
Acquisition of assets of Labtech Diagnostics, LLC On December 13, 2021, the Company completed the acquisition of assets of Labtech Diagnostics, LLC ("Labtech"), an independent clinical diagnostic laboratory provider serving physicians and patients primarily in South Carolina, North Carolina, Florida and Georgia, in an all cash transaction for $95 million, which consisted of cash consideration of $80 million and contingent consideration initially estimated at $15 million.
Borrowings under our secured receivables credit facility and our senior unsecured revolving credit facility are subject to variable interest rates. Interest on our secured receivables credit facility is based on either commercial paper rates for highly-rated issuers or the Term Secured Overnight Financing Rate ("Term SOFR"), plus a spread.
Borrowings under our secured receivables credit facility and our senior unsecured revolving credit facility are subject to variable interest rates. Interest on our secured receivables credit facility is based on either commercial paper rates for highly rated issuers or the adjusted Term Secured Overnight Financing Rate ("Term SOFR"), plus a spread.
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.
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.
Depreciation and amortization are provided on the straight-line method over expected useful asset lives as of December 31, 2022 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, 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.
See Note 19 to the audited consolidated financial statements for a discussion of our reserves for general and professional liability claims. 63 Table of Contents Reserves for other legal proceedings Our businesses are subject to or impacted by extensive and frequently changing laws and regulations, including inspections and audits by governmental agencies, in the United States (at both the federal and state levels) and the other jurisdictions in which we conduct business.
See Note 19 to the audited consolidated financial statements for a discussion of our reserves for general and professional liability claims. 62 Table of Contents Reserves for other legal proceedings Our businesses are subject to or impacted by extensive and frequently changing laws and regulations, including inspections and audits by governmental agencies, in the United States (at both the federal and state levels) and the other jurisdictions in which we conduct business.
We identified the following reporting units for goodwill impairment testing in 2022: • 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 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.
F-43 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) The following table is a summary of segment information for the years ended December 31, 2022, 2021 and 2020. Segment asset information is not presented since it is not used by the CODM at the operating segment level.
F-43 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) The following table is a summary of segment information for the years ended December 31, 2023, 2022 and 2021. Segment asset information is not presented since it is not used by the CODM at the operating segment level.
For the years ended December 31, 2022, 2021, and 2020, the tax effects related to the deferred gains (losses) on cash flow hedges and net changes in available-for-sale debt securities were not material. Foreign currency translation adjustments related to indefinite investments in non-U.S. subsidiaries are not adjusted for income taxes.
For the years ended December 31, 2023, 2022, and 2021, the tax effects related to the deferred gains (losses) on cash flow hedges and net changes in available-for-sale debt securities were not material. Foreign currency translation adjustments related to indefinite investments in non-U.S. subsidiaries are not adjusted for income taxes.
Dividend Program During each of the four quarters of 2022, the Company's Board of Directors declared a quarterly cash dividend of $0.66 per common share. During each of the four quarters of 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.62 per common share.
During each of the four quarters of 2022, the Company's Board of Directors declared a quarterly cash dividend of $0.66 per common share. During each of the four quarters of 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.62 per common share.
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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 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, 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.
The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The pronouncement was effective immediately and, due to an accounting standards update which the FASB issued in December 2022, can be applied to contract modifications through December 31, 2024.
The amendments apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate which was discontinued because of reference rate reform. The pronouncement was effective immediately and, due to an accounting update which the FASB issued in December 2022, can be applied to contract modifications through December 31, 2024.
For each of the years ended December 31, 2022, 2021 and 2020, the Company's expense for matching contributions to these plans was not material. 19. COMMITMENTS AND CONTINGENCIES Letters of Credit and Contractual Obligations The Company can issue letters of credit under its Secured Receivables Credit Facility and Senior Unsecured Revolving Credit Facility (see Note 14).
For each of the years ended December 31, 2023, 2022 and 2021, the Company's expense for matching contributions to these plans was not material. 19. COMMITMENTS AND CONTINGENCIES Letters of Credit and Contractual Obligations The Company can issue letters of credit under its Secured Receivables Credit Facility and Senior Unsecured Revolving Credit Facility (see Note 14).
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 64 Table of Contents 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 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 portfolios determined using the portfolio approach consist of the following groups of customers: healthcare insurers, government payers (Medicare and Medicaid programs), client payers and patients. Contracts with customers in the DIS business do not contain significant financing components based on the typical period of time between performance of services and collection of consideration.
The 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 complaint alleged that the Company’s actions were an invasion of privacy and contributed to a loss of value in plaintiffs’ personally identifiable information. The Company moved to dismiss the case or, in the alternative, transfer venue to the U.S. District Court for New Jersey. Subsequently, plaintiffs filed an amended complaint.
The complaint alleged that the Company’s actions were an invasion of privacy and contributed to a loss of value in plaintiffs’ personally identifiable information. The Company moved to dismiss the case or, in the alternative, transfer venue to the U.S. District Court for New Jersey. Subsequently, plaintiffs filed an amended complaint, which the Company also moved to dismiss.
F-16 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) The approximate percentage of net revenues by type of customer was as follows: Year Ended December 31, 2022 2021 2020 Healthcare insurers: Fee-for-service 38 % 39 % 34 % Capitated 3 3 3 Total healthcare insurers 41 42 37 Government payers 11 10 11 Client payers 33 33 38 Patients (including coinsurance and deductible responsibilities) 12 12 11 Total DIS 97 97 97 DS 3 3 3 Net revenues 100 % 100 % 100 % For the years ended December 31, 2022, 2021 and 2020, substantially all of the Company’s services were provided within the United States, see Note 20.
F-16 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) The approximate percentage of net revenues by type of payer customer was as follows: Year Ended December 31, 2023 2022 2021 Healthcare insurers: Fee-for-service 37 % 38 % 39 % Capitated 3 3 3 Total healthcare insurers 40 41 42 Government payers 11 11 10 Client payers 34 33 33 Patients (including coinsurance and deductible responsibilities) 12 12 12 Total DIS 97 97 97 DS 3 3 3 Net revenues 100 % 100 % 100 % For the years ended December 31, 2023, 2022 and 2021, substantially all of the Company’s services were provided within the United States, see Note 20.
AMCA Data Security Incident On June 3, 2019, the Company reported that Retrieval-Masters Creditors Bureau, Inc./American Medical Collection Agency (“AMCA”) had informed the Company and Optum360 LLC that an unauthorized user had access to AMCA’s system between August 1, 2018 and March 30, 2019 (the “AMCA Data Security Incident”).
On June 3, 2019, the Company reported that Retrieval-Masters Creditors Bureau, Inc./American Medical Collection Agency (“AMCA”) had informed the Company and Optum360 LLC that an unauthorized user had access to AMCA’s system between August 1, 2018 and March 30, 2019 (the “AMCA Data Security Incident”).
Critical Audit Matters F-1 The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
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, 2022, 2021, and 2020, 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, 2023, 2022, and 2021, lease expense associated with short-term leases was not material.
The portfolios determined using the portfolio approach consist of the following customers: • Healthcare Insurers • 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 • 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 any capitated 62 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 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.
Net revenues from Medicare and Medicaid programs were approximately 11%, 10% and 11% of the Company's consolidated net revenues for the years ended December 31, 2022, 2021 and 2020, respectively. Taxes on Income The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year.
Net revenues from Medicare and Medicaid programs were approximately 11%, 11% and 10% of the Company's consolidated net revenues for the years ended December 31, 2023, 2022 and 2021, respectively. Taxes on Income The provision for income taxes represents income taxes paid or payable for the current year plus the change in deferred taxes during the year.
The remaining terms of the lease obligations and the Company's corresponding indemnifications range up to 25 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 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.
Further adjustments to the allowances, based on actual receipts, may be recorded upon settlement. 61 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. 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.
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, 2022 and 2021 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, 2023 and 2022 accounted for greater than 95% of our consolidated net revenues. Our other operating segments consist of our DS businesses.
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, 2022, 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, 2023, the Company does not believe that material losses related to legal matters are probable.
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 $13 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 $12 million within the next twelve months.
The Secured Receivables Credit Facility is subject to customary affirmative and negative covenants and certain financial covenants with respect to the receivables that comprise the borrowing base and secure the borrowings under the facility. As of both December 31, 2022 and 2021, there were no outstanding borrowings under the Secured Receivables Credit Facility.
The Secured Receivables Credit Facility is subject to customary affirmative and negative covenants and certain financial covenants with respect to the receivables that comprise the borrowing base and secure the borrowings under the facility. As of both December 31, 2023 and 2022, there were no outstanding borrowings under the Secured Receivables Credit Facility.
These procedures also included, among others, testing management's process for developing the estimate for contractual allowances, including (i) evaluating the appropriateness of the methodology, (ii) testing the completeness and accuracy of the historical contractual allowance and collection data from the Company’s billing system, which is an input to the methodology, and (iii) evaluating the reasonableness of management’s assumptions used to estimate contractual allowances by comparing actual cash collected to the prior year estimate (net accounts receivable). /s/ PricewaterhouseCoopers LLP Florham Park, New Jersey February 21, 2023 We have served as the Company’s auditor since 1995.
These procedures also included, among others, testing management's process for developing the estimate for contractual allowances, including (i) evaluating the appropriateness of the methodology, (ii) testing the completeness and accuracy of the historical contractual allowance and collection data from the Company’s billing system, which is an input to the methodology, and (iii) evaluating the reasonableness of management’s assumptions used to estimate contractual allowances by comparing actual cash collected to the prior year estimate (net accounts receivable). /s/ PricewaterhouseCoopers LLP Florham Park, New Jersey February 22, 2024 We have served as the Company’s auditor since 1995.
Results of Operations For a comparison of results of operations for the year ended December 31, 2021 compared to December 31, 2020, along with the results of operations for the year ended December 31, 2020, see "Item 7 - Management's Discussion and Analysis of Financial Condition and Result of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2021.
Results of Operations For a comparison of results of operations for the year ended December 31, 2022 compared to December 31, 2021, along with the results of operations for the year ended December 31, 2021, see "Item 7 - Management's Discussion and Analysis of Financial Condition and Result of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2022.
Management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2022 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, 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.
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, 2022, 2021 and 2020 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, 2023, 2022 and 2021 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, 2022, 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, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, 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, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
The following are descriptions of the DIS business’ portfolios: Healthcare Insurers Reimbursements from healthcare insurers are based on negotiated fee-for-service schedules and on capitated payment rates. Under fee-for-service arrangements, healthcare insurers are billed at the Company's list price.
The following are descriptions of the DIS business’ portfolios: Healthcare Insurers/Health Plans Reimbursements from healthcare insurers are based on negotiated fee-for-service schedules and on capitated payment rates. Under fee-for-service arrangements, healthcare insurers are billed at the Company's list price.
See Note 10 for cash flow information on cash paid for amounts included in the measurement of lease liabilities and leased assets obtained in exchange for new operating lease liabilities for the years ended December 31, 2022, 2021 and 2020.
See Note 10 for cash flow information on cash paid for amounts included in the measurement of lease liabilities and leased assets obtained in exchange for new operating lease liabilities for the years ended December 31, 2023, 2022 and 2021.
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 2020, 2021 and 2022 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 2021, 2022 and 2023 were based on the financial performance of the Company, as well as relative TSR.
As of December 31, 2022, 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 1.5 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, 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.
For the years ended December 31, 2022 and 2021, the Company performed a qualitative impairment test for its DIS reporting unit and, based on the totality of information available, the Company concluded that it was more-likely-than-not that the estimated fair value of its DIS reporting unit was greater than the carrying value of the reporting unit and, as such, no further analysis was required.
For the year ended December 31, 2022, the Company performed a qualitative impairment test for its DIS reporting unit and, based on the totality of information available, the Company concluded that it was more-likely-than-not that the estimated fair value of its DIS reporting unit was greater than the carrying value of the reporting unit and, as such, no further analysis was required.
As of December 31, 2022 and 2021, the fair value of our debt was estimated at approximately $3.7 billion and $4.4 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, 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, 2022, a summary of the tax years that remain subject to examination, awaiting approval, are under appeal, or are otherwise unresolved for the Company's major jurisdictions are: United States - federal 2019 - 2021 United States - various states 2007 - 2021 F-26 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 10.
As of December 31, 2023, a summary of the tax years that remain subject to examination, awaiting approval, are under appeal, or are otherwise unresolved for the Company's major jurisdictions are: United States - federal 2020 - 2022 United States - various states 2007 - 2022 F-26 Table of Contents QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED (in millions unless otherwise indicated) 10.
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 2018 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 2019 tax year.
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.
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.
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, 2022 and issued their audit report on the Company's internal control over financial reporting included herein. 74 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, 2022 and 2021, 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, 2022, 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, 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”).
The indefinite-lived intangible asset impairment test is performed at least annually, or more frequently in the case of other events that indicate a potential impairment. Based upon the Company’s most recent annual impairment tests completed during the fourth quarters of the years ended December 31, 2022 and 2021, 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, 2023 and 2022, the Company concluded that indefinite-lived intangible assets were not impaired.
These investments are measured at fair value with both realized and unrealized gains and losses recorded in current earnings within other (expense) income, net in the consolidated statements of operations. For the years ended December 31, 2022, 2021 and 2020, (losses)/gains from all equity investments with readily determinable fair values totaled $(55) million, $56 million, and $8 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, 2023, 2022 and 2021, gains/(losses) from all equity investments with readily determinable fair values totaled $20 million, $(55) million, and $56 million, respectively.
New Accounting Standards New Accounting Standards To Be Adopted In March 2020, the Financial Accounting Standards Board ("FASB") issued a new accounting standard which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform due to the risk of cessation of the London Interbank Offered Rate ("LIBOR").
New Accounting Standards In March 2020, the Financial Accounting Standards Board ("FASB") issued a new accounting standard which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform due to the cessation of the London Interbank Offered Rate ("LIBOR").
Based on this assessment, management has determined that the Company's internal control over financial reporting as of December 31, 2022 is effective.
Based on this assessment, management has determined that the Company's internal control over financial reporting as of December 31, 2023 is effective.
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.
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.
In support of its risk management program, to ensure the Company’s performance or payment to third parties, $70 million in letters of credit under the Secured Receivables Credit Facility were outstanding as of December 31, 2022. 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, $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.
The maximum number of shares of Company common stock in respect of which awards may be granted under the ELTIP is approximately 79 million shares.
The maximum number of shares of Company common stock in respect of which awards may be granted under the ELTIP is approximately 87 million shares.
Reserves for legal matters totaled $2 million and $4 million as of December 31, 2022 and December 31, 2021, 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 $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.
The effective income tax rate for the years ended December 31, 2022 and 2021 was 21.4% and 23.0%, respectively. The year ended December 31, 2022 includes an $18 million income tax benefit due to a cumulative adjustment to state deferred tax liabilities related to depreciation expense, which impacted the effective income tax rate by 1.5%.
The effective income tax rate for the years ended December 31, 2023 and 2022 was 22.0% and 21.4%, respectively. The year ended December 31, 2022 includes an $18 million income tax benefit due to a cumulative adjustment to state deferred tax liabilities related to depreciation expense, which impacted the effective income tax rate by 1.5%.
As of December 31, 2022 and 2021, receivables due from patients represented approximately 18% and 21%, respectively, of the Company's consolidated net accounts receivable. The Company applies assumptions and judgments including historical collection experience (including the period of time that the receivables have been outstanding) for assessing collectability and determining net revenues and accounts receivable from patients.
As of December 31, 2023 and 2022, receivables due from patients represented approximately 20% and 18%, respectively, of the Company's consolidated net accounts receivable. The Company applies assumptions and judgments including historical collection experience (including the period of time that the receivables have been outstanding) for assessing collectability and determining net revenues and accounts receivable from patients.
As of December 31, 2022 and 2021, the Company had approximately $16 million and $20 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, 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.
The maximum number of shares that may be issued under the DLTIP is 2.4 million shares. For the years ended December 31, 2022, 2021 and 2020, grants under the DLTIP totaled 10 thousand shares, 12 thousand shares and 14 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, 2023, 2022 and 2021, grants under the DLTIP totaled 12 thousand shares, 10 thousand shares and 12 thousand shares, respectively.
As of December 31, 2022 and 2021, the following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges included in the carrying amount of long-term debt: Hedge Accounting Basis Adjustment (a) Balance Sheet Classification December 31, 2022 December 31, 2021 Long-term debt $ 26 $ 38 (a) As of both December 31, 2022 and 2021, the entire balance is associated with remaining unamortized hedging adjustments on discontinued relationships.
As of December 31, 2023 and 2022, the following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges included in the carrying amount of long-term debt: Hedge Accounting Basis Adjustment (a) Balance Sheet Classification December 31, 2023 December 31, 2022 Long-term debt $ 13 $ 26 (a) As of both December 31, 2023 and 2022, the entire balance is associated with remaining unamortized hedging adjustments on discontinued relationships. 17.
The Company also offers certain employees the opportunity to participate in a non-qualified deferred compensation program. The Company matches employee contributions equal to 25%, up to a maximum of $5 thousand per plan year.
The Company also offers certain employees the opportunity to participate in a non-qualified deferred compensation program. The Company matches employee contributions equal to 25%, up to a maximum of five thousand dollars per plan year.
TAXES ON INCOME The Company's pre-tax income before equity in earnings of equity method investees consisted of approximately $1.2 billion, $2.5 billion and $1.9 billion from U.S. operations and pre-tax income (loss) of $2 million, $148 million and $(7) million from foreign operations for the years ended December 31, 2022, 2021 and 2020, respectively.
TAXES ON INCOME The Company's pre-tax income before equity in earnings of equity method investees consisted of approximately $1.1 billion, $1.2 billion and $2.5 billion from U.S. operations and pre-tax income of $7 million, $2 million and $148 million from foreign operations for the years ended December 31, 2023, 2022 and 2021, respectively.
Although the Company is currently contributing all participant deferrals and matching amounts to a trust, the funds in this trust, totaling $68 million and $77 million as of December 31, 2022 and 2021, 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 $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.
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 $52 million and $66 million as of December 31, 2022 and 2021, 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 $61 million and $52 million as of December 31, 2023 and 2022, respectively.
As of December 31, 2022, substantially all of the Company’s services were provided within the United States, and substantially all of the Company’s assets were located within the United States.
As of December 31, 2023, substantially all of the Company’s services were provided within the United States, and substantially all of the Company’s assets were located within the United States.
Income Tax Expense Income tax expense for the years ended December 31, 2022 and 2021 was $264 million and $597 million, respectively. The decrease in income tax expense compared to the prior year was primarily driven by a decrease in income before income taxes and equity in earnings of equity method investees.
Income Tax Expense Income tax expense for the years ended December 31, 2023 and 2022 was $248 million and $264 million, respectively. The decrease in income tax expense compared to the prior year was primarily driven by a decrease in income before income taxes and equity in earnings of equity method investees.
As of December 31, 2022, we had $1.2 billion of borrowing capacity available under our existing credit facilities, including $455 million available under our secured receivables credit facility and $750 million available under our senior unsecured revolving credit facility. There were no borrowings under these credit facilities as of December 31, 2022.
As of December 31, 2023, we had $1.2 billion of borrowing capacity available under our existing credit facilities, including $453 million available under our secured receivables credit facility and $750 million available under our senior unsecured revolving credit facility. There were no borrowings under these credit facilities as of December 31, 2023.
The Company's leases have remaining terms of less than 1 year to 15 years, some of which include options to extend the leases for up to 15 years. The Company's lease terms may include renewal options that are reasonably certain to be exercised and termination options that are reasonably certain not to be exercised.
The Company's leases have remaining terms of less than 1 year to 14 years, some of which include options to extend the leases for up to approximately 20 years. The Company's lease terms may include renewal options that are reasonably certain to be exercised and termination options that are reasonably certain not to be exercised.
Under the ESPP, the maximum number of shares of Quest Diagnostics common stock which may be purchased by eligible employees is 9 million. Approximately 216 thousand shares, 200 thousand shares and 225 thousand shares of common stock were purchased by eligible employees in 2022, 2021 and 2020, 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 208 thousand shares, 216 thousand shares and 200 thousand shares of common stock were purchased by eligible employees in 2023, 2022 and 2021, respectively.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWhile certain of the economic impacts of the COVID-19 pandemic have eased and many COVID-19 related restrictions have been lifted or relaxed as a result of progress in COVID-19 vaccination, testing and treatment, a rise in infection rates, the emergence of new COVID-19 variants or any future pandemic could result in, among other things, a reduction in physician office visits and diagnostic testing volume, the cancellation of elective medical procedures, or customers closing or curtailing their operations, as well as increased unemployment and loss of health insurance.
Biggest changeAny future public health emergency or pandemic could expose us to the risks we experienced during the COVID-19 pandemic and result in, among other things, a reduction in physician office visits and diagnostic testing volume, the cancellation of elective medical procedures, or customers closing or curtailing their operations, as well as increased unemployment and loss of health insurance.
Our business, consolidated financial condition, revenues, results of operations, profitability, reputation or cash flows, or the price of our common stock, could be materially impacted by any of these factors. This Report also includes forward-looking statements that involve risks or uncertainties.
Our business, consolidated financial condition, revenues, results of operations, profitability, cash flows or reputation , or the price of our common stock, could be materially impacted by any of these factors. This Report also includes forward-looking statements that involve risks or uncertainties.
Changes in applicable laws and regulations may result in existing practices becoming more restricted, or subject our existing or proposed services to additional costs, delay, modification or withdrawal. Such changes also could require us to modify our business objectives. Our business could be adversely impacted by the FDA's approach to regulation.
Changes in applicable laws and regulations may result in existing practices becoming more restricted, or subject our existing or proposed services to additional costs, delay, modification or withdrawal. Such changes also could require us to modify our business objectives. Our business and operations could be adversely impacted by the FDA's approach to regulation.
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 affects 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 • injury to our reputation.
For example, in June 2019, the Company reported that Retrieval-Masters Creditors Bureau, Inc./American Medical Collection Agency (“AMCA”), informed the Company about a data security incident involving AMCA.
For example, in June 2019, the Company reported that Retrieval-Masters Creditors Bureau, Inc./American Medical Collection Agency (AMCA), informed the Company about a data security incident involving AMCA.
Investors are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this document. The following important factors could cause our actual financial results to differ materially from those projected, forecasted or estimated by us in forward-looking statements: (a) Heightened competition from commercial clinical testing companies, IDNs, physicians and others.
Investors are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this document. The following important factors could cause our actual financial results to differ materially from those projected, forecasted or estimated by us in forward-looking statements: (a) Heightened competition from commercial clinical testing companies, hospitals, physicians and others.
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.
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.
ACOs and IDNs 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 clinical testing providers.
(x) Failure to adapt to changes in the healthcare system (including the medical laboratory testing market) and healthcare delivery, including those stemming from PAMA, trends in utilization of the healthcare system and increased patient financial responsibility for services. (y) Results and consequences of governmental inquiries. (z) Difficulty in implementing, or lack of success with, our strategic plan.
(y) Failure to adapt to changes in the healthcare system (including the medical laboratory testing market) and healthcare delivery, including those stemming from PAMA, trends in utilization of the healthcare system and increased patient financial responsibility for services. (z) Results and consequences of governmental inquiries. (aa) Difficulty in implementing, or lack of success with, our strategic plan.
We have taken, and continue to take, precautionary measures to reduce the risk of, and detect and respond to, future cyber threats, and prevent or minimize vulnerabilities in our IT systems, including the loss or theft of intellectual property, patient and employee data or other confidential information that we obtain and store on our systems.
We have taken, and continue to take, precautionary measures to reduce the risk of, and detect and respond to, future cybersecurity threats, and prevent or minimize vulnerabilities in our IT systems, including the loss or theft of intellectual property, patient and employee data or other confidential information that we obtain and store on our systems.
Our operations may be adversely impacted by the effects of natural disasters such as hurricanes and earthquakes, public health emergencies and health pandemics, 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 across the United States, and consumers frequently visit our facilities in person.
Although the Company has robust security measures implemented, which are monitored and routinely tested both by internal resources and external parties, cyber threats against us continue to evolve and may not be recognized until after an incident.
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.
We may be sued under physician liability or other liability law for acts or omissions by our pathologists, laboratory personnel and IDN 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 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.
(q) Development of tests by our competitors or others which we may not be able to license, or usage (or theft) of our technology or similar technologies or our trade secrets or other intellectual property by competitors, any of which could negatively affect our competitive position.
(r) Development of tests by our competitors or others which we may not be able to license, or usage (or theft) of our technology or similar technologies or our trade secrets or other intellectual property by competitors, any of which could negatively affect our competitive position.
Some traditional customers for anatomic pathology services, including specialty physicians that generate biopsies through surgical procedures, such as dermatologists, gastroenterologists, urologists and oncologists, are consolidating, have added in-office histology labs or have retained pathologists to read cases on site. IDNs also are internalizing clinical laboratory testing, including some non-routine and advanced testing.
Additionally, some traditional customers for anatomic pathology services, including specialty physicians that generate biopsies through surgical procedures, such as dermatologists, gastroenterologists, urologists and oncologists, are consolidating, have added in-office histology labs or have retained pathologists to read cases on site. Hospitals also are internalizing clinical laboratory testing, including some non-routine and advanced testing.
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 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 IDNs; • marketing to consumers; 35 Table of Contents • 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; 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.
Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan” or “continue.” These forward-looking statements are based on our current plans and expectations and are subject to a number of risks and uncertainties that could cause our plans and expectations, including actual results, to differ materially from the forward-looking statements.
Forward-looking statements include all statements that do not relate solely to historical or current facts and can be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “aim,” “endeavor” or “continue.” These forward-looking statements are based on our current plans and expectations and are subject to a number of risks and uncertainties that could cause our plans and expectations, including actual results, to differ materially from the forward-looking statements.
(r) Regulatory delay or inability to commercialize newly developed or licensed tests or technologies or to obtain appropriate reimbursements for such tests. (s) The complexity of billing and revenue recognition for clinical laboratory testing.
(s) Regulatory delay or inability to commercialize newly developed or licensed tests or technologies or to obtain appropriate reimbursements for such tests. (t) The complexity of billing and revenue recognition for clinical laboratory testing.
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, reimbursement and marketing of services; existing and emerging data privacy regulations affecting the processing and transfer of personal data; 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; emerging regulations relating to the use of AI; and challenges based on differing languages and cultures.
We are subject to numerous political, legal, operational and other risks as a result of our international operations which could impact our business in many ways.
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.
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.
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.
Despite redundancy and backup measures and precautions that we have implemented, our IT systems may be vulnerable to damage, disruptions and shutdown from a variety of sources, including telecommunications or network failures, system conversion or standardization initiatives, human acts and natural disasters.
Despite redundancy and backup measures and precautions that we have implemented, our IT systems may be vulnerable to damage, disruptions and shutdown from a variety of sources, including the age of the technology, telecommunications or network failures, system conversion, standardization or modernization initiatives, human acts and natural disasters.
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 U.S. A number of tests we develop internally are offered as LDTs.
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.
To the extent the COVID-19 pandemic or any future pandemic adversely affects our business, results of operations and financial condition, it may also have the effect of heightening other risks described in this Report. Inflationary pressures could adversely impact us because of increases in the costs of materials, supplies and services, and increased labor and people-related expenses.
To the extent any future public health emergency or pandemic adversely affects our business, results of operations and financial condition, it may also have the effect of heightening other risks described in this Report. Inflationary pressures could adversely impact us because of increases in the costs of materials, supplies and services, and increased labor and people-related expenses.
(w) Difficulties and uncertainties in the discovery, development, regulatory environment and/or marketing of new services or solutions or new uses of existing tests.
(x) Difficulties and uncertainties in the discovery, development, regulatory environment and/or marketing of new services or solutions or new uses of existing tests.
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.
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.
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.
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.
Significant change is taking place in the healthcare system, including as discussed above under the heading The Clinical Testing Industry, beginning on page 14. For example, value-based reimbursement is increasing ( e.g. , UnitedHealthcare's Preferred Lab Network); CMS has set goals for value-based reimbursement to be achieved by 2030.
Significant change is taking place in the healthcare system, including as discussed above under the heading "The Clinical Testing Industry". For example, value-based reimbursement is increasing ( e.g. , UnitedHealthcare's Preferred Lab Network) and CMS has set goals for value-based reimbursement to be achieved by 2030.
In recent years, there has been a trend of IDNs acquiring physician practices, increasing the percentage of physician practices owned by IDNs. Increased IDN ownership of physician practices may enhance clinician ties to IDN-affiliated laboratories and may strengthen their competitive position.
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.
(v) Terrorist and other criminal activities, hurricanes, earthquakes or other natural disasters, and public health emergencies and health pandemics, which could affect our customers or suppliers, transportation or systems, or our facilities, and for which insurance may not adequately reimburse us.
(w) Terrorist and other criminal activities, hurricanes, earthquakes or other natural disasters, geopolitical matters, public health emergencies and pandemics, which could affect our customers or suppliers, transportation or systems, or our facilities, and for which insurance may not adequately reimburse us.
These factors include: the timing, extent, trajectory and duration of any pandemic; increases in COVID-19 infection rates and the geographic location of such increases; the development, availability, distribution and effectiveness of vaccines and treatments; the imposition of protective public safety measures; and the impact of any pandemic on supply chain and the global economy.
These factors include: the timing, extent, trajectory and duration of any public health emergency or pandemic; increases in infection rates and the geographic location of such increases; the development, availability, distribution and effectiveness of vaccines and treatments; the imposition of protective public safety measures; and the impact of any public health emergency or pandemic on supply chain and the global economy.
See “Cautionary Factors that May Affect Future Results” on page 42 . 32 Table of Contents RISKS RELATED TO OUR BUSINESS The U.S. healthcare system is evolving 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” 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.
We expect efforts to reduce reimbursements, to impose more stringent cost controls and to reduce utilization of clinical test services will continue. 33 Table of Contents Pursuant to PAMA, reimbursement rates for many clinical laboratory tests provided under Medicare were reduced from 2018 - 2020.
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.
As a result of this affiliation between IDNs and community clinicians, we compete against IDN-affiliated laboratories primarily based on quality and scope of service as well as pricing. In addition, IDNs that own physician practices may encourage or require the practices to refer testing to the IDN'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. In addition, hospitals that own physician practices may encourage or require the practices to refer testing to the hospital's laboratory.
We may be unable to develop or introduce new solutions or services. Other companies or individuals, including our competitors, may obtain patents or other property rights on tests or processes that we may be performing, that could prevent, limit or interfere with our ability to develop, perform or sell our tests or operate our business.
Other companies or individuals, including our competitors, may obtain patents or other property rights on tests or processes that we may be performing, that could prevent, limit or interfere with our ability to develop, perform or sell our tests or operate our business.
These events also may result in a decline in the number of patients who seek clinical testing services or in our employees' ability to perform their job duties. The COVID-19 pandemic or any future pandemic may negatively affect us, including through its impact on the labor force and supply chain.
These events also may result in a decline in the number of patients who seek clinical testing services or in our employees' ability to perform their job duties. Any future public health emergencies or pandemics may negatively affect us, including through its impact on the labor force and supply chain.
IDNs generally maintain on-site laboratories to perform testing on their patients (inpatient or outpatient). In addition, many IDNs compete with commercial clinical laboratories for outreach (non-IDN patients) testing. IDNs may seek to leverage their relationships with community clinicians and encourage the clinicians to send their outreach testing to the IDN's laboratory.
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.
Our ability to attract and retain qualified employees is critical to the success of our business and the failure to do so may materially adversely affect our performance.
Our ability to attract and retain qualified employees and maintain good relations with our employees is critical to the success of our business and the failure to do so may materially adversely affect our performance.
If legislation that authorizes the FDA to regulate LDTs were to become law, it could have a significant impact on the clinical laboratory testing industry, including regulating LDTs in new ways, while creating avenues of opportunity and competition regarding clinical laboratory testing. New competitors may enter the industry, and competition may come in new forms.
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.
In addition, we collaborate with government agencies regarding potential cyber threats and have worked with firms that have cyber security expertise to evaluate our systems and the attacks we experience and strengthen 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 36 Table of Contents our systems.
Advances in technology also may lead to the need for less frequent testing. Further, diagnostic tests approved or cleared by the FDA for home use are automatically deemed to be “waived” tests under CLIA and may be performed by consumers in their homes; test kit manufacturers could seek to increase sales to patients of such test kits.
Further, diagnostic tests approved or cleared by the FDA for home use are automatically deemed to be “waived” tests under CLIA and may be performed by consumers in their homes; test kit manufacturers could seek to increase sales to patients of such test kits.
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 integration of operations and systems and the realization of potential operating synergies, 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, 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.
(t) 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. (u) Inability to hire or retain qualified employees, including key senior management personnel.
(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.
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, earthquakes or other extreme weather conditions, including major winter storms, droughts and heat waves, whether as a result of climate change or otherwise; public health emergencies and health pandemics; 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 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.
(o) Development of technologies that substantially alter the practice of clinical testing, including technology changes that lead to the development of more convenient or cost-effective testing, or testing to be performed outside of a commercial clinical laboratory, such as (1) point-of-care testing that can be performed by physicians in their offices, (2) advanced testing that can be performed by IDNs in their own laboratories or (3) home testing that can be carried out without requiring the services of clinical laboratories.
(o) Development of technologies that substantially alter the practice of clinical testing, including technology changes that lead to the development of more convenient, accessible and cost-effective testing, or 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 or home testing that can be carried out without requiring the services of clinical laboratories.
Competitors also may offer testing to be performed outside of a commercial clinical laboratory, such as (1) point-of-care testing that can be performed by physicians in their offices; (2) advanced testing that can be performed by IDNs in their own laboratories; and (3) 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.
Competitors also may offer testing to be performed outside of a commercial clinical laboratory, such as (1) point-of-care testing that can be performed by clinicians in their offices; (2) complex testing that can be performed by IDNs in their own laboratories; and (3) 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.
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 U.S., including the European Union's General Data Protection Regulation and similar laws in other jurisdictions.
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.
A number of suppliers and manufacturers we rely upon have experienced, and may continue to experience, disruptions and delays stemming from raw material and labor shortages, supply challenges and 41 Table of Contents significant disruptions in transport and logistics services due to facility closures, labor constraints and other challenges.
Suppliers and manufacturers we rely upon may experience disruptions and delays stemming from raw material and labor shortages, supply challenges and significant disruptions in transport and logistics services due to facility closures, labor constraints and other challenges.
Health plans, and independent physician associations, may demand that clinical testing providers accept discounted fee structures or assume all or a portion of the financial risk associated with providing testing services to their members through capitated payment arrangements. Some health plans also are reviewing test coding, evaluating coverage decisions and requiring preauthorization of certain testing.
Health plans, and independent physician associations, may demand that clinical testing providers accept discounted fee structures or assume all or a portion of the financial risk associated with providing testing services to their members through capitated payment arrangements.
We may also experience labor shortages and supply chain disruptions, including shortages, delays and price increases in testing equipment and supplies, as a result of the COVID-19 pandemic or any future pandemic.
We may also experience labor shortages and supply chain disruptions, including shortages, delays and price increases in testing equipment and supplies, as a result of a public health emergency or pandemic.
We expect that the evolution of the healthcare industry will continue, and that industry change is likely to be extensive. The clinical testing business is highly competitive, and if we fail to provide an appropriately priced level of service or otherwise fail to compete effectively it could have a material adverse effect on our revenues and profitability.
The clinical testing business is highly competitive, and if we fail to provide an appropriately priced level of service or otherwise fail to compete effectively it could have a material adverse effect on our revenues and profitability. The clinical testing business remains a fragmented and highly competitive industry.
It is important that we continue to strengthen our efficiency to promote our competitive position and to 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.
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.
If such ratings are lowered, our borrowing costs could increase. Changes in our credit ratings, however, do not require repayment or acceleration of any of our debt.
If such ratings are lowered, our borrowing costs could increase. Changes in our credit ratings, however, do not require repayment or acceleration of any of our debt. We or our subsidiaries may incur additional indebtedness in the future.
(p) Negative developments regarding intellectual property and other property rights that could prevent, limit or interfere with our ability to develop, perform or sell our tests or operate our business.
(p) Challenges with properly managing the development and use of AI. (q) Negative developments regarding intellectual property and other property rights that could prevent, limit or interfere with our ability to develop, perform or sell our tests or operate our business.
The supply of qualified technical, professional, managerial and other personnel, including cytotechs, phlebotomists and processors, is currently constrained; competition for qualified employees, even across different industries, is intense, including as individuals leave the job market.
The supply of qualified technical, professional, managerial and other personnel, including cytotechs, phlebotomists and specimen processors, is currently constrained; competition for qualified employees, even across different industries, is intense, including as individuals leave the job market. We may lose, or fail to attract and retain, key management personnel, or qualified skilled technical, professional or other employees.
(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, capitated or bundled fee arrangements.
(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.
In the event of a data security breach, we may be subject to notification obligations, litigation and governmental investigation or sanctions, and may suffer reputational damage, which could have an adverse impact on our business.
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. In the event of a data security breach, we may be subject to notification obligations, litigation and governmental investigation or sanctions, and may suffer reputational damage, which could have an adverse impact on our business.
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. Our success in continuing to introduce new solutions, technology and services will depend, in part, on our ability to license new and improved technologies on favorable terms.
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.
The clinical testing business remains a fragmented and highly competitive industry. We primarily compete with three types of clinical testing providers: other commercial clinical laboratories, IDN-affiliated laboratories and physician-office laboratories. We also compete with other providers, including anatomic pathology practices, large physician group practices and providers of consumer-initiated testing.
We primarily compete with three types of clinical testing providers: other commercial clinical laboratories, including smaller regional and local commercial clinical laboratories and specialized advanced laboratories, hospital-affiliated laboratories and physician-office laboratories. We also compete with other providers, including anatomic pathology practices, large physician group practices and providers of consumer-initiated testing.
These attacks, if successful, could result in shutdowns or significant disruptions of our IT systems and/or in unauthorized persons exfiltrating and misappropriating intellectual property and other confidential information, including patient and employee data that we collect, transmit and store on and through our IT systems. 39 Table of Contents 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.
These attacks, if successful, could result in shutdowns or significant disruptions of our IT systems and/or in unauthorized persons exfiltrating and misappropriating intellectual property and other confidential information, including patient and employee data that we collect, transmit and store on and through our IT systems.
RISKS RELATED TO OUR OPERATIONS The development of new technologies (including artificial intelligence technologies) may impact the healthcare industry, and the development of new, more cost-effective solutions that can be performed by our customers or by patients, and the continued internalization of testing by IDNs or clinicians, could negatively impact our testing volume and revenues.
The development of new, more cost-effective solutions that can be performed by our customers or by patients, which could accelerate the internalization of testing by hospitals or clinicians, could negatively impact our testing volume and revenues.
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.
Our IT systems have been and are subject to potential cyberattacks, tampering or other security breaches.
Our approach to environmental, social and governance (ESG) matters may not satisfy all our stakeholders. 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 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.
Internalization of testing may reduce demand for services previously referred to outside service providers, such as the Company. 38 Table of Contents Hardware and software failures or delays in our information technology 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 or otherwise, could disrupt our operations and cause the loss of confidential information, customers and business opportunities or otherwise adversely impact our business.
(aa) The impact of healthcare data analysis on our industry and the ability of our Company to adapt to that impact. (bb) Failure to adequately operationalize appropriate controls around use of our data, including risk of non-compliance with privacy law requirements. (cc) The COVID-19 pandemic. Item 1B. Unresolved Staff Comments There are no unresolved SEC comments that require disclosure.
(bb) The impact of healthcare data analysis on our industry and the ability of our Company to adapt to that impact. (cc) Failure to adequately operationalize appropriate controls around use of our data, including risk of non-compliance with privacy law requirements. (dd) Any future public health emergency or pandemic. (ee) The other factors that are discussed within “Item 1.
The diagnostic information services industry is faced with changing technology and new product introductions, including technology that enables more convenient or cost-effective testing. For example, digital pathology is an emerging technology that may change the practice of pathology. Information technology that includes self-learning or "artificial intelligence" features is growing and may impact the healthcare industry.
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.
There are also an increasing number of patients enrolling in consumer driven products and high deductible plans that involve greater patient cost-sharing. 34 Table of Contents 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 (which can be inconsistent between health plans and government payers) to obtain payment, increased documentation requirements, limiting the allowable number of tests or ordering frequency, expanded prior authorization programs and otherwise increasing payment denials.
These proceedings also may result in substantial monetary damages. 37 Table of Contents RISKS RELATED TO OUR INDEBTEDNESS Our outstanding debt may impair our financial and operating flexibility. As of December 31, 2022, we had approximately $4.0 billion of debt outstanding.
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 include, in particular, monetary damages, loss or suspension of licenses, and/or suspension or exclusion from the Medicare and Medicaid programs and/or criminal penalties. 42 Table of Contents (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.
(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.
These conditions may continue or deteriorate in the future, including in the event of a future pandemic outbreak. The extent to which we may be impacted by the COVID-19 pandemic or any future pandemic will depend on many factors beyond our knowledge or control.
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.
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. Despite our efforts, we may not achieve our ESG goals on the timetable we set or at all.
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.
PAMA calls for further revision of the Medicare Clinical Laboratory Fee Schedule for years after 2020, based on future surveys of market rates; reimbursement rate reduction from 2024-26 is capped by PAMA at 15% annually.
PAMA calls for further revision of the Medicare CLFS for years after 2020, based on future surveys of market rates.
Additionally, certain of our stakeholders may not be satisfied with our decisions related to ESG matters, the goals we set regarding ESG matters, 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.
Despite our efforts, we may not achieve our ESG goals on the timetable we set or at all. Additionally, certain of our stakeholders may not be satisfied with our decisions related to ESG matters, the goals we set regarding ESG matters, our progress towards these goals or the resulting outcomes.
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.
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 majority of billing and related operations for our Company are being provided by a third party under the Company's oversight. Failure to accurately bill for our services could have a material adverse effect on our business.
Failure to accurately bill for our services could have a material adverse effect on our business.
PAMA's next data collection and reporting period have been delayed, most recently by federal legislation adopted in December 2022, which further delayed the reimbursement rate reductions and reporting requirements until January 1, 2024. In addition, CMS has adopted policies limiting or excluding coverage for clinical tests that we perform.
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.
In addition, we believe that clinical testing market fundamentals are changing. We believe that PAMA-driven reimbursement pressure remains a catalyst for structural change in the market. We also believe that health plans and consumers increasingly are focusing on driving better value in laboratory testing services.
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.
Our ability to make principal and interest payments will depend on our ability to generate cash in the future.
Increases in interest rates may increase our financing costs making it more challenging for us to incur additional debt necessary to fund our operations and strategic objectives.Our ability to make principal and interest payments will depend on our ability to generate cash in the future.
Billing for diagnostic information services is complex and subject to extensive and non-uniform rules and administrative requirements. Depending on the billing arrangement and applicable law, we bill various payers, such as patients, insurance companies, Medicare, Medicaid, clinicians, IDNs and employer groups.
Depending on the billing arrangement and applicable law, we bill various payers, such as patients, insurance companies, Medicare, Medicaid, clinicians, hospitals and employer groups. The majority of billing and related operations for our Company are being provided by a third party under the Company's oversight.

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Item 2. Properties

Properties — owned and leased real estate

4 edited+0 added−0 removed1 unchanged
Biggest changeWe also maintain offices, data centers, call centers, distribution centers and patient service centers at locations throughout the 43 Table of Contents United States. In addition, we maintain offices, patient service centers and clinical laboratories in locations outside the United States, including in Finland, Puerto Rico and Mexico.
Biggest changeIn 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.
Location 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 800 Business Center Drive, Horsham, Pennsylvania 19044 (laboratory) 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
Location 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
Item 2. Properties Our executive offices are located at 500 Plaza Drive, Secaucus, New Jersey. We maintain clinical testing laboratories throughout the continental United States; in several instances a joint venture of which we are a partner maintains the laboratory.
Item 2. Properties Our executive offices are located at 500 Plaza Drive, Secaucus, New Jersey. We maintain clinical testing laboratories throughout the continental United States; in several instances a joint venture of which we are a partner maintains the laboratory. We also maintain offices, data centers, call centers, distribution centers and patient service centers at locations throughout the United States.
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. We believe that, in general, our facilities are suitable and adequate for our current and anticipated future levels of operation and are adequately maintained.
We believe that, in general, our facilities are suitable and adequate for our current and anticipated future levels of operation and are adequately maintained.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeClosing 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) 12/31/2018 $ 83.27 (13.84) % (4.38) % 6.47 % $ 86.16 $ 95.62 $ 106.47 12/31/2019 $ 106.79 31.15 % 31.49 % 20.82 % $ 113.00 $ 125.72 $ 128.64 12/31/2020 $ 119.17 14.04 % 18.40 % 13.45 % $ 128.86 $ 148.85 $ 145.93 12/31/2021 $ 173.01 47.86 % 28.71 % 26.13 % $ 190.52 $ 191.58 $ 184.07 12/30/2022 $ 156.44 (7.79) % (18.13) % (1.95) % $ 175.68 $ 156.85 $ 180.47 Item 6 [Reserved]
Biggest changeClosing 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]
(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. 45 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, 2017 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. 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.
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 2022.
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.
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, 2023, we had approximately 2,225 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 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.
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, including the $1 billion increase in February 2023. The share repurchase authorization has no set expiration or termination date.
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.
ISSUER 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, 2022 – October 31, 2022 Share Repurchase Program (A) 457,049 $ 142.22 457,049 $ 680,909 Employee Transactions (B) — $ — N/A N/A November 1, 2022 – November 30, 2022 Share Repurchase Program (A) 1,332,783 $ 147.01 1,332,783 $ 484,973 Employee Transactions (B) 691 $ 145.44 N/A N/A December 1, 2022 – December 31, 2022 Share Repurchase Program (A) 1,151,247 $ 151.20 1,151,247 $ 310,909 Employee Transactions (B) — $ — N/A N/A Total Share Repurchase Program (A) 2,941,079 $ 147.90 2,941,079 $ 310,909 Employee Transactions (B) 691 $ 145.44 N/A N/A (A) In February 2022, our Board of Directors increased the size of our share repurchase program by $1 billion.
ISSUER 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.
Removed
As of December 31, 2022, $0.3 billion remained available under our share repurchase authorization. In February 2023, we announced that our Board of Directors authorized us to repurchase an additional $1 billion of our common stock.

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 58 . 46 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 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.

Other DGX 10-K year-over-year comparisons