SECAUCUS, N.J., April 22,
2021 /PRNewswire/ -- Quest Diagnostics Incorporated (NYSE:
DGX), the world's leading provider of diagnostic information
services, announced today financial results for the first quarter
ended March 31, 2021.
"Quest had a very strong first quarter, with our base business
continuing its recovery to near pre-pandemic levels," said
Steve Rusckowski, Chairman, CEO and
President, Quest Diagnostics. "Contributions from acquisitions and
Professional Lab Services relationships accelerated growth in the
base business and helped offset the reduction in demand for
COVID-19 testing, which was in line with industry trends. In March,
for the first time since the pandemic began, monthly organic
revenue in the base business grew versus our 2019 baseline. As we
noted at our recent Investor Day, Quest is well positioned to grow
as the U.S. exits the pandemic and people return to normal
activities and address the routine care issues that have been
neglected over the past year."
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
|
Change
|
|
(dollars in millions,
except per share data)
|
Reported:
|
|
|
|
|
|
Net
revenues
|
$
|
2,720
|
|
|
$
|
1,822
|
|
|
49.3
|
%
|
Diagnostic Information
Services revenues
|
$
|
2,643
|
|
|
$
|
1,744
|
|
|
51.5
|
%
|
Revenue per
requisition
|
|
|
|
|
20.5
|
%
|
Requisition
volume
|
|
|
|
|
25.6
|
%
|
Organic
requisition volume
|
|
|
|
|
21.6
|
%
|
Operating income
(a)
|
$
|
660
|
|
|
$
|
175
|
|
|
277.2
|
%
|
Operating income as a
percentage of net revenues (a)
|
24.3
|
%
|
|
9.6
|
%
|
|
14.7
|
%
|
Net income
attributable to Quest Diagnostics (a)
|
$
|
469
|
|
|
$
|
99
|
|
|
374.3
|
%
|
Diluted EPS
(a)
|
$
|
3.46
|
|
|
$
|
0.73
|
|
|
375.8
|
%
|
Cash provided by
operations
|
$
|
731
|
|
|
$
|
247
|
|
|
194.9
|
%
|
Capital
expenditures
|
$
|
86
|
|
|
$
|
83
|
|
|
3.3
|
%
|
|
|
|
|
|
|
Adjusted
(a):
|
|
|
|
|
|
Operating
income
|
$
|
708
|
|
|
$
|
225
|
|
|
215.7
|
%
|
Operating income as a
percentage of net revenues
|
26.0
|
%
|
|
12.3
|
%
|
|
13.7
|
%
|
Net income
attributable to Quest Diagnostics
|
$
|
508
|
|
|
$
|
128
|
|
|
296.9
|
%
|
Diluted
EPS
|
$
|
3.76
|
|
|
$
|
0.94
|
|
|
298.9
|
%
|
|
|
(a)
|
For further details
impacting the year-over-year comparisons related to operating
income, operating income as a percentage of net revenues, net
income attributable to Quest Diagnostics, and diluted EPS, see note
2 of the financial tables attached below.
|
Share repurchase update
The company expects to launch an accelerated share repurchase in
the amount of approximately $1.5
billion in the coming days.
As of March 31, 2021, $2.5
billion remained available under the company's share
repurchase authorization, reflecting a $1
billion increase by the Board of Directors in March. Also,
as previously announced, the Board of Directors increased the share
repurchase authorization by $1
billion in February.
For the three months ended March 31,
2021, the company repurchased 3.4 million shares of its
common stock for $410 million.
Updated outlook for first half of 2021
The company updates its outlook for the first half of 2021 as
follows:
|
Updated
Outlook
|
|
Previous
Outlook
|
|
Low
|
|
High
|
|
Low
|
|
High
|
Net
revenues
|
$5.00
billion
|
|
$5.20
billion
|
|
$4.85
billion
|
|
$5.15
billion
|
Net revenues
increase
|
37.0%
|
|
42.5%
|
|
32.9%
|
|
41.1%
|
Reported diluted
EPS
|
$7.51
|
|
$8.01
|
|
$5.07
|
|
$6.07
|
Adjusted diluted
EPS
|
$6.30
|
|
$6.80
|
|
$5.90
|
|
$6.90
|
Cash provided by
operations
|
At least
$1 billion
|
|
At least
$800 million
|
Capital
expenditures
|
Approximately
$200 million
|
|
Approximately
$200 million
|
Note on Non-GAAP Financial Measures
As used in this press release the term "reported" refers to
measures under accounting principles generally accepted in
the United States ("GAAP"). The
term "adjusted" refers to non-GAAP operating performance measures
that exclude special items such as restructuring and integration
charges, certain financial impacts resulting from the COVID-19
pandemic, amortization expense, excess tax benefits ("ETB")
associated with stock-based compensation, costs associated with
donations, contributions, and other financial support through Quest
for Health Equity, the company's initiative with the Quest
Diagnostics Foundation to reduce health disparities in underserved
communities, a gain on sale of an ownership interest in a joint
venture, and other items.
Non-GAAP adjusted measures are presented because management
believes those measures are useful adjuncts to GAAP results.
Non-GAAP adjusted measures should not be considered as an
alternative to the corresponding measures determined under GAAP.
Management may use these non-GAAP measures to evaluate our
performance period over period and relative to competitors, to
analyze the underlying trends in our business, to establish
operational budgets and forecasts and for incentive compensation
purposes. We believe that these non-GAAP measures are useful to
investors and analysts to evaluate our performance period over
period and relative to competitors, as well as to analyze the
underlying trends in our business and to assess our performance.
The additional tables attached below include reconciliations of
non-GAAP adjusted measures to GAAP measures.
Conference Call Information
Quest Diagnostics will hold its quarterly conference call to
discuss financial results beginning at 8:30
a.m. Eastern Time today. The conference call can be
accessed by dialing 888-455-0391 within the U.S. and Canada, or 773-756-0467 internationally,
passcode: 7895081; or via live webcast on the company's website at
www.QuestDiagnostics.com/investor. The company suggests
participants dial in approximately 10 minutes before the call.
A replay of the call may be accessed online at
www.QuestDiagnostics.com/investor or by phone at 888-566-0490
for domestic callers or 203-369-3053 for international
callers. Telephone replays will be available from approximately
10:30 a.m. Eastern Time on
April 22, 2021 until midnight Eastern
Time on May 6, 2021.
Anyone listening to the call is encouraged to read the company's
periodic reports, on file with the Securities and Exchange
Commission, including the discussion of risk factors and historical
results of operations and financial condition in those reports.
About Quest Diagnostics
Quest Diagnostics empowers people to take action to improve
health outcomes. Derived from the world's largest database of
clinical lab results, our diagnostic insights reveal new avenues to
identify and treat disease, inspire healthy behaviors and improve
health care management. Quest annually serves one in three
adult Americans and half the physicians and hospitals in
the United States, and our nearly
50,000 employees understand that, in the right hands and with the
right context, our diagnostic insights can inspire actions that
transform lives. www.QuestDiagnostics.com.
Forward Looking Statements
The statements in this press release which are not historical
facts may be forward-looking statements. Readers are
cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date that they are made and
which reflect management's current estimates, projections,
expectations or beliefs and which involve risks and uncertainties
that could cause actual results and outcomes to be materially
different. Risks and uncertainties that may affect the future
results of the company include, but are not limited to, impacts of
the COVID-19 pandemic and measures taken in response, adverse
results from pending or future government investigations, lawsuits
or private actions, the competitive environment, the complexity of
billing, reimbursement and revenue recognition for clinical
laboratory testing, changes in government regulations, changing
relationships with customers, payers, suppliers or strategic
partners and other factors discussed in the company's most recently
filed Annual Report on Form 10-K and in any of the company's
subsequently filed Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K, including those discussed in the "Business,"
"Risk Factors," "Cautionary Factors that May Affect Future Results"
and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" sections of those reports.
This earnings release, including the attached financial tables,
is available online in the Newsroom section at
www.QuestDiagnostics.com.
ADDITIONAL TABLES FOLLOW
Quest Diagnostics
Incorporated and Subsidiaries
Consolidated
Statements of Operations
For the Three
Months Ended March 31, 2021 and 2020
(in millions,
except per share data)
(unaudited)
|
|
|
Three Months
Ended March 31,
|
|
2021
|
|
2020
|
Net
revenues
|
$
|
2,720
|
|
|
$
|
1,822
|
|
|
|
|
|
Operating costs
and expenses and other operating income:
|
|
|
|
Cost of
services
|
1,626
|
|
|
1,270
|
|
Selling, general and
administrative
|
407
|
|
|
347
|
|
Amortization of
intangible assets
|
27
|
|
|
25
|
|
Other operating
expense, net
|
—
|
|
|
5
|
|
Total operating costs
and expenses, net
|
2,060
|
|
|
1,647
|
|
|
|
|
|
Operating
income
|
660
|
|
|
175
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
Interest expense,
net
|
(38)
|
|
|
(41)
|
|
Other income
(expense), net
|
4
|
|
|
(16)
|
|
Total non-operating
expense, net
|
(34)
|
|
|
(57)
|
|
|
|
|
|
Income before
income taxes and equity in earnings of equity method
investees
|
626
|
|
|
118
|
|
Income tax
expense
|
(153)
|
|
|
(26)
|
|
Equity in earnings
of equity method investees, net of taxes
|
17
|
|
|
14
|
|
Net
income
|
490
|
|
|
106
|
|
Less: Net income
attributable to noncontrolling interests
|
21
|
|
|
7
|
|
Net income
attributable to Quest Diagnostics
|
$
|
469
|
|
|
$
|
99
|
|
|
|
|
|
Earnings per share
attributable to Quest Diagnostics' common
stockholders:
|
|
|
|
Basic
|
$
|
3.52
|
|
|
$
|
0.74
|
|
|
|
|
|
Diluted
|
$
|
3.46
|
|
|
$
|
0.73
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
Basic
|
133
|
|
|
134
|
|
|
|
|
|
Diluted
|
135
|
|
|
135
|
|
Quest Diagnostics
Incorporated and Subsidiaries
Consolidated
Balance Sheets
March 31,
2021 and December 31, 2020
(in millions,
except per share data)
(unaudited)
|
|
|
March 31,
2021
|
|
December
31,
2020
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
1,230
|
|
|
$
|
1,158
|
|
Accounts receivable,
net
|
1,382
|
|
|
1,520
|
|
Inventories
|
223
|
|
|
223
|
|
Prepaid expenses and
other current assets
|
164
|
|
|
157
|
|
Total current
assets
|
2,999
|
|
|
3,058
|
|
Property, plant
and equipment, net
|
1,624
|
|
|
1,627
|
|
Operating lease
right-of-use assets
|
600
|
|
|
604
|
|
Goodwill
|
6,870
|
|
|
6,873
|
|
Intangible assets,
net
|
1,141
|
|
|
1,167
|
|
Investments in
equity method investees
|
527
|
|
|
521
|
|
Other
assets
|
170
|
|
|
176
|
|
Total
assets
|
$
|
13,931
|
|
|
$
|
14,026
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
1,559
|
|
|
$
|
1,633
|
|
Current portion of
long-term debt
|
2
|
|
|
2
|
|
Current portion of
long-term operating lease liabilities
|
146
|
|
|
141
|
|
Total current
liabilities
|
1,707
|
|
|
1,776
|
|
Long-term
debt
|
4,010
|
|
|
4,013
|
|
Long-term
operating lease liabilities
|
503
|
|
|
499
|
|
Other
liabilities
|
842
|
|
|
847
|
|
Redeemable
noncontrolling interest
|
79
|
|
|
82
|
|
Stockholders'
equity:
|
|
|
|
Quest Diagnostics
stockholders' equity:
|
|
|
|
|
|
|
|
Common stock, par
value $0.01 per share; 600 shares authorized as of both March 31,
2021 and
December 31, 2020; 217 shares issued as of both March 31, 2021 and
December 31, 2020
|
2
|
|
|
2
|
|
Additional paid-in
capital
|
2,824
|
|
|
2,841
|
|
Retained
earnings
|
9,690
|
|
|
9,303
|
|
Accumulated other
comprehensive loss
|
(31)
|
|
|
(21)
|
|
Treasury stock, at
cost; 86 and 84 shares as of March 31, 2021 and December 31,
2020,
respectively
|
(5,740)
|
|
|
(5,366)
|
|
Total Quest
Diagnostics stockholders' equity
|
6,745
|
|
|
6,759
|
|
Noncontrolling
interests
|
45
|
|
|
50
|
|
Total stockholders'
equity
|
6,790
|
|
|
6,809
|
|
Total liabilities
and stockholders' equity
|
$
|
13,931
|
|
|
$
|
14,026
|
|
Quest Diagnostics
Incorporated and Subsidiaries
Consolidated
Statements of Cash Flows
For the Three
Months Ended March 31, 2021 and 2020
(in
millions)
(unaudited)
|
|
|
Three Months Ended
March 31,
|
|
2021
|
|
2020
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
490
|
|
|
$
|
106
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
101
|
|
|
85
|
|
Provision for credit
losses
|
2
|
|
|
7
|
|
Deferred income tax
(benefit) provision
|
(17)
|
|
|
14
|
|
Stock-based
compensation expense
|
18
|
|
|
14
|
|
Other, net
|
(2)
|
|
|
(2)
|
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
138
|
|
|
85
|
|
Accounts payable and
accrued expenses
|
(164)
|
|
|
(47)
|
|
Income taxes
payable
|
163
|
|
|
(3)
|
|
Other assets and
liabilities, net
|
2
|
|
|
(12)
|
|
Net cash provided
by operating activities
|
731
|
|
|
247
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Business
acquisitions, net of cash acquired
|
—
|
|
|
(108)
|
|
Capital
expenditures
|
(86)
|
|
|
(83)
|
|
Increase in
investments and other assets
|
(7)
|
|
|
(15)
|
|
Net cash used in
investing activities
|
(93)
|
|
|
(206)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Repayments of
debt
|
(1)
|
|
|
(801)
|
|
Purchases of treasury
stock
|
(410)
|
|
|
(75)
|
|
Exercise of stock
options
|
17
|
|
|
80
|
|
Employee payroll tax
withholdings on stock issued under stock-based compensation
plans
|
(21)
|
|
|
(13)
|
|
Dividends
paid
|
(75)
|
|
|
(71)
|
|
Distributions to
noncontrolling interest partners
|
(29)
|
|
|
(7)
|
|
Other financing
activities, net
|
(47)
|
|
|
(4)
|
|
Net cash used in
financing activities
|
(566)
|
|
|
(891)
|
|
|
|
|
|
Net change in cash
and cash equivalents and restricted cash
|
72
|
|
|
(850)
|
|
Cash and cash
equivalents and restricted cash, beginning of period
|
1,158
|
|
|
1,192
|
|
Cash and cash
equivalents and restricted cash, end of period
|
$
|
1,230
|
|
|
$
|
342
|
|
|
|
|
|
Cash paid during
the period for:
|
|
|
|
Interest
|
$
|
32
|
|
|
$
|
48
|
|
Income
taxes
|
$
|
7
|
|
|
$
|
18
|
|
Notes to Financial
Tables
|
|
1) The
computation of basic and diluted earnings per common share is as
follows:
|
|
|
Three Months
Ended
March 31,
|
|
2021
|
|
2020
|
|
|
|
(in millions, except
per share data)
|
Amounts
attributable to Quest Diagnostics' common
stockholders:
|
|
|
|
Net income
attributable to Quest Diagnostics
|
$
|
469
|
|
|
$
|
99
|
|
Less: earnings
allocated to participating securities
|
1
|
|
|
—
|
|
Earnings available to
Quest Diagnostics' common stockholders - basic and
diluted
|
$
|
468
|
|
|
$
|
99
|
|
|
|
|
|
Weighted average
common shares outstanding - basic
|
133
|
|
|
134
|
|
Effect of dilutive
securities:
|
|
|
|
Stock options and
performance share units
|
2
|
|
|
1
|
|
Weighted average
common shares outstanding - diluted
|
135
|
|
|
135
|
|
|
|
|
|
Earnings per share
attributable to Quest Diagnostics' common
stockholders:
|
|
|
|
Basic
|
$
|
3.52
|
|
|
$
|
0.74
|
|
Diluted
|
$
|
3.46
|
|
|
$
|
0.73
|
|
2) The
following tables reconcile reported GAAP results to non-GAAP
adjusted results:
|
|
|
|
Three Months Ended
March 31, 2021
|
|
(dollars in
millions, except per share data)
|
|
Operating
income
|
|
Operating
income as a
percentage of
net revenues
|
|
Income tax
expense (d)
|
|
Equity in
earnings of
equity method
investees, net
of taxes
|
|
Net income
attributable to
Quest
Diagnostics
|
|
Diluted
EPS
|
As
reported
|
$
|
660
|
|
|
24.3
|
%
|
|
$
|
(153)
|
|
|
$
|
17
|
|
|
$
|
469
|
|
|
$
|
3.46
|
|
Restructuring and
integration charges (a)
|
17
|
|
|
0.6
|
|
|
(4)
|
|
|
—
|
|
|
13
|
|
|
0.10
|
|
COVID-19 impact
(b)
|
4
|
|
|
0.1
|
|
|
(1)
|
|
|
—
|
|
|
3
|
|
|
0.03
|
|
Other (c)
|
—
|
|
|
—
|
|
|
(3)
|
|
|
8
|
|
|
5
|
|
|
0.04
|
|
Amortization
expense
|
27
|
|
|
1.0
|
|
|
(7)
|
|
|
2
|
|
|
22
|
|
|
0.16
|
|
ETB
|
—
|
|
|
—
|
|
|
(4)
|
|
|
—
|
|
|
(4)
|
|
|
(0.03)
|
|
As
adjusted
|
$
|
708
|
|
|
26.0
|
%
|
|
$
|
(172)
|
|
|
$
|
27
|
|
|
$
|
508
|
|
|
$
|
3.76
|
|
|
|
|
|
|
Three Months Ended
March 31, 2020
|
|
(dollars in
millions, except per share data)
|
|
Operating
income
|
|
Operating
income as a
percentage of
net revenues
|
|
Income tax
expense (d)
|
|
Equity in
earnings of
equity method
investees, net
of taxes
|
|
Net income
attributable to
Quest
Diagnostics
|
|
Diluted
EPS
|
As
reported
|
$
|
175
|
|
|
9.6
|
%
|
|
$
|
(26)
|
|
|
$
|
14
|
|
|
$
|
99
|
|
|
$
|
0.73
|
|
Restructuring and
integration charges (a)
|
16
|
|
|
0.8
|
|
|
(4)
|
|
|
—
|
|
|
12
|
|
|
0.09
|
|
COVID-19 impact
(b)
|
9
|
|
|
0.5
|
|
|
(3)
|
|
|
—
|
|
|
4
|
|
|
0.03
|
|
Amortization
expense
|
25
|
|
|
1.4
|
|
|
(7)
|
|
|
3
|
|
|
21
|
|
|
0.15
|
|
ETB
|
—
|
|
|
—
|
|
|
(8)
|
|
|
—
|
|
|
(8)
|
|
|
(0.06)
|
|
As
adjusted
|
$
|
225
|
|
|
12.3
|
%
|
|
$
|
(48)
|
|
|
$
|
17
|
|
|
$
|
128
|
|
|
$
|
0.94
|
|
|
|
|
|
|
|
(a)
|
For both the three
months ended March 31, 2021 and 2020, represents costs primarily
associated with systems conversions and integration incurred in
connection with further restructuring and integrating our
business. The following table summarizes the pre-tax impact
of restructuring and integration charges on the company's
consolidated statements of operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
(dollars in
millions)
|
|
|
|
Cost of
services
|
|
$
|
7
|
|
|
$
|
7
|
|
|
|
|
Selling, general and
administrative
|
|
10
|
|
|
9
|
|
|
|
|
Operating
income
|
|
$
|
17
|
|
|
$
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
For
both the three months ended March 31, 2021 and 2020,
represents the impact of certain items resulting from the COVID-19
pandemic. For the three months ended March 31, 2021,
includes incremental costs incurred to protect the health and
safety of the company's employees and customers. For the
three months ended March 31, 2020, principally includes
certain asset impairment charges, and incremental costs incurred
primarily to protect the health and safety of the company's
employees and customers and to transition certain employees to a
remote work environment.
|
|
|
|
|
|
|
|
The
following table summarizes the pre-tax impact of these COVID-19
items on the company's consolidated statements of
operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
(dollars in
millions)
|
|
|
|
Cost of
services
|
|
$
|
4
|
|
|
$
|
1
|
|
|
|
|
Selling, general and
administrative
|
|
—
|
|
|
3
|
|
|
|
|
Other operating
expense, net
|
|
—
|
|
|
5
|
|
|
|
|
Operating
income
|
|
$
|
4
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interest
|
|
$
|
—
|
|
|
$
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
For the three months
ended March 31, 2021, the pre-tax impact represents a non-cash
impairment to the carrying value of an equity method
investment.
|
|
|
(d)
|
For restructuring and
integration charges, COVID-19 impacts, other items and amortization
expense, income tax impacts, where recorded, were primarily
calculated using combined statutory income tax rates of 25.5% for
both 2021 and 2020.
|
3)
|
For the three months
ended March 31, 2021, the company repurchased 3.4 million
shares of its common stock for $410 million. In each of
February and March 2021, the company's Board of Directors
increased the size of its share repurchase program by
$1 billion. As of March 31, 2021, $2.5 billion
remained available under the company's share repurchase
authorization.
|
|
|
4)
|
The outlook for
adjusted diluted EPS represents management's estimates for the
first half of 2021 before the impact of special items. Further
impacts to earnings related to special items may occur throughout
2021. Additionally, the amount of ETB is dependent upon
employee stock option exercises and the company's stock price,
which are difficult to predict. The following table
reconciles our first half of 2021 outlook for adjusted diluted EPS
to the corresponding amounts determined under GAAP:
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
Diluted
EPS
|
$
|
7.51
|
|
|
$
|
8.01
|
|
|
|
|
Restructuring and
integration charges (a)
|
0.30
|
|
|
0.30
|
|
|
|
|
COVID-19 impact
(b)
|
0.04
|
|
|
0.04
|
|
|
|
|
Amortization expense
(c)
|
0.31
|
|
|
0.31
|
|
|
|
|
Costs associated with
Quest for Health Equity (d)
|
0.09
|
|
|
0.09
|
|
|
|
|
Gain on sale of
ownership interest in joint venture (e)
|
(1.85)
|
|
|
(1.85)
|
|
|
|
|
ETB
|
(0.10)
|
|
|
(0.10)
|
|
|
|
|
Adjusted diluted
EPS
|
$
|
6.30
|
|
|
$
|
6.80
|
|
|
|
|
|
|
|
(a)
|
Represents estimated
pre-tax charges of $50 million primarily associated with systems
conversions and integration costs incurred in connection with
further restructuring and integrating our business. Income
tax benefits were calculated using a combined statutory income tax
rate of 25.5%.
|
|
|
|
|
|
|
(b)
|
Represents estimated
pre-tax charges of $5 million associated with the impact of certain
items resulting from the COVID-19 pandemic. Income tax
benefits were calculated using a combined statutory income tax rate
of 25.5%.
|
|
|
|
|
|
|
(c)
|
Represents the
estimated impact of amortization expense for first half of 2021 on
the calculation of adjusted diluted EPS. Amortization expense used
in the calculation is as follows (dollars in millions):
|
|
|
|
|
Amortization of
intangible assets
|
$
|
52
|
|
Amortization expense
included in equity in earnings of equity method investees, net of
taxes
|
2
|
|
Total pre-tax
amortization expense
|
$
|
54
|
|
|
|
Total amortization
expense, net of an estimated tax benefit using a combined statutory
income tax
rate of 25.5%
|
$
|
41
|
|
|
|
(d)
|
Represents estimated pre-tax charges of $15 million
associated with donations, contributions and other financial
support through Quest for Health Equity, the company's initiative
with the Quest Diagnostics Foundation to reduce health disparities
in underserved communities. Income tax benefits were
calculated using a combined statutory income tax rate of
25.5%.
|
|
|
(e)
|
Represents an estimated pre-tax gain of
$310 million to be recorded during the second quarter of 2021
following the sale, on April 1, 2021, of the company's 40%
ownership interest in Q2 Solutions®, our
central laboratory services joint venture, to IQVIA Holdings, Inc.,
our joint venture partner for $760 million in an all-cash
transaction. Income tax expense was calculated using an
estimated income tax rate of 21%. The actual income tax
expense is subject to finalization and will be calculated in the
second quarter of 2021.
|
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SOURCE Quest Diagnostics