Quest Diagnostics (DGX) 10-Q28 Apr 232023 Q1 Quarterly reportFinancial data

Company Profile

Cover Page

Cover Page - shares	3 Months Ended
Cover Page - shares	Mar. 31, 2023	Apr. 14, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-12215
Entity Registrant Name	Quest Diagnostics Inc
Entity Central Index Key	0001022079
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	16-1387862
Entity Address, Address Line One	500 Plaza Drive
Entity Address, City or Town	Secaucus,
Entity Address, State or Province	NJ
Entity Address, Postal Zip Code	07094
City Area Code	(973)
Local Phone Number	520-2700
Title of 12(b) Security	Common Stock, $0.01 Par Value
Trading Symbol	DGX
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		112,009,197

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Net revenues	$ 2,331	$ 2,611
Operating costs and expenses and other operating income:
Cost of services	1,560	1,646
Selling, general and administrative	439	425
Amortization of intangible assets	26	27
Other operating expense, net	1	0
Total operating costs and expenses, net	2,026	2,098
Operating income	305	513
Other income (expense):
Interest expense, net	(35)	(37)
Other income (expense), net	7	(24)
Total non-operating expense, net	(28)	(61)
Income before income taxes and equity in earnings of equity method investees	277	452
Income tax expense	(65)	(110)
Equity in earnings of equity method investees, net of taxes	5	31
Net income	217	373
Less: Net income attributable to noncontrolling interests	15	18
Net income attributable to Quest Diagnostics	$ 202	$ 355
Earnings per share attributable to Quest Diagnostics’ common stockholders:
Basic (in dollars per share)	$ 1.80	$ 2.97
Diluted (in dollars per share)	$ 1.78	$ 2.92
Weighted average common shares outstanding:
Basic (in Shares)	112	119
Diluted (in Shares)	113	121

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 217	$ 373
Other comprehensive income (loss):
Foreign currency translation adjustment	3	(2)
Other comprehensive income (loss)	3	(2)
Comprehensive income	220	371
Less: Comprehensive income attributable to noncontrolling interests	15	18
Comprehensive income attributable to Quest Diagnostics	$ 205	$ 353

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Assets
Cash and cash equivalents	$ 175	$ 315
Accounts receivable, net of allowance for credit losses of $30 as of both March 31, 2023 and December 31, 2022	1,254	1,195
Inventories	190	192
Prepaid expenses and other current assets	195	196
Total current assets	1,814	1,898
Property, plant and equipment, net	1,795	1,766
Operating lease right-of-use assets	589	585
Goodwill	7,241	7,220
Intangible assets, net	1,077	1,092
Investments in equity method investees	128	132
Other assets	150	144
Total assets	12,794	12,837
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses	1,198	1,396
Current portion of long-term debt	2	2
Current portion of long-term operating lease liabilities	155	153
Total current liabilities	1,355	1,551
Long-term debt	3,975	3,978
Long-term operating lease liabilities	490	489
Other liabilities	809	812
Commitments and contingencies
Redeemable noncontrolling interest	77	77
Quest Diagnostics stockholders’ equity:
Common stock, par value $0.01 per share; 600 shares authorized as of both March 31, 2023 and December 31, 2022; 162 shares issued as of both March 31, 2023 and December 31, 2022	2	2
Additional paid-in capital	2,266	2,295
Retained earnings	8,412	8,290
Accumulated other comprehensive loss	(18)	(21)
Treasury stock, at cost; 50 and 51 shares as of March 31, 2023 and December 31, 2022, respectively	(4,612)	(4,673)
Total Quest Diagnostics stockholders' equity	6,050	5,893
Noncontrolling interests	38	37
Total stockholders' equity	6,088	5,930
Total liabilities and stockholders' equity	$ 12,794	$ 12,837

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Millions, $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 30	$ 30
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	600	600
Common stock, shares issued (in shares)	162	162
Treasury stock (in shares)	50	51

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net income	$ 217	$ 373
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	107	106
Credit for credit losses	(1)	0
Deferred income tax benefit	(4)	(43)
Stock-based compensation expense	24	18
Other, net	3	4
Changes in operating assets and liabilities:
Accounts receivable	(58)	72
Accounts payable and accrued expenses	(211)	(165)
Income taxes payable	11	95
Other assets and liabilities, net	6	20
Net cash provided by operating activities	94	480
Cash flows from investing activities:
Business acquisitions, net of cash acquired	(31)	(105)
Capital expenditures	(127)	(63)
Increase in investments and other assets	0	(1)
Net cash used in investing activities	(158)	(169)
Cash flows from financing activities:
Proceeds from borrowings	140	0
Repayments of debt	(140)	(1)
Purchases of treasury stock	0	(373)
Exercise of stock options	25	10
Employee payroll tax withholdings on stock issued under stock-based compensation plans	(28)	(27)
Dividends paid	(74)	(74)
Distributions to noncontrolling interest partners	(14)	(20)
Other financing activities, net	15	14
Net cash used in financing activities	(76)	(471)
Net change in cash and cash equivalents and restricted cash	(140)	(160)
Cash and cash equivalents and restricted cash, beginning of period	315	872
Cash and cash equivalents and restricted cash, end of period	$ 175	$ 712

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions	Total	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock, at Cost	Non-controlling Interests
Balance, shares at Dec. 31, 2021		119
Balance, value at Dec. 31, 2021	$ 6,483	$ 2	$ 2,260	$ 7,649	$ (14)	$ (3,453)	$ 39
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	371			355			16
Other comprehensive income (loss), net of taxes	(2)				(2)
Dividends declared	(78)			(78)
Distributions to noncontrolling interest partners	(17)						(17)
Issuance of common stock under benefit plans, shares		1
Issuance of common stock under benefit plans	7		(41)			48
Stock-based compensation expense	18		18
Exercise of stock options	10		(1)			11
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans	(27)		(10)			$ (17)
Purchases of treasury stock, shares		(3)				(2.6)
Purchases of treasury stock	(350)					$ (350)
Balance, shares at Mar. 31, 2022		117
Balance, value at Mar. 31, 2022	6,415	$ 2	2,226	7,926	(16)	(3,761)	38
Balance, Value at Dec. 31, 2021	79
Redeemable Non-controlling Interest [Abstract]
Net income	2
Distributions to noncontrolling interest partners	(3)
Balance, Value at Mar. 31, 2022	78
Balance, shares at Dec. 31, 2022		111
Balance, value at Dec. 31, 2022	5,930	$ 2	2,295	8,290	(21)	(4,673)	37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	216						14
Other comprehensive income (loss), net of taxes	3				3
Dividends declared	(80)			(80)
Distributions to noncontrolling interest partners	(13)						(13)
Issuance of common stock under benefit plans, shares		1
Issuance of common stock under benefit plans	6		(42)			48
Stock-based compensation expense	24		24
Exercise of stock options	30		(1)			31
Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans	(28)		(10)			$ (18)
Purchases of treasury stock, shares						0
Balance, shares at Mar. 31, 2023		112
Balance, value at Mar. 31, 2023	6,088	$ 2	$ 2,266	$ 8,412	$ (18)	$ (4,612)	$ 38
Balance, Value at Dec. 31, 2022	77
Redeemable Non-controlling Interest [Abstract]
Net income	1
Distributions to noncontrolling interest partners	(1)
Balance, Value at Mar. 31, 2023	$ 77

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	3 Months Ended
DESCRIPTION OF BUSINESS	Mar. 31, 2023
Description of Business (Abstract)
DESCRIPTION OF BUSINESS	DESCRIPTION OF BUSINESS Background

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Mar. 31, 2023
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The interim unaudited consolidated financial statements reflect all adjustments which in the opinion of management are necessary for a fair statement of results of operations, comprehensive income, financial condition, cash flows and stockholders' equity for the periods presented. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s 2022 Annual Report on Form 10-K. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2022 but does not include all the disclosures required by accounting principles generally accepted in the United States (“GAAP”). The accounting policies of the Company are the same as those set forth in Note 2 to the audited consolidated financial statements contained in the Company’s 2022 Annual Report on Form 10-K. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Earnings Per Share The Company's unvested restricted stock units that contain non-forfeitable rights to dividends are participating securities and, therefore, are included in the earnings allocation in computing earnings per share using the two-class method. Basic earnings per common share is calculated by dividing net income attributable to Quest Diagnostics, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding. Diluted earnings per common share is calculated by dividing net income attributable to Quest Diagnostics, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding after giving effect to all potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the dilutive effect of outstanding stock options and performance share units granted under the Company's Amended and Restated Employee Long-Term Incentive Plan and outstanding stock options granted under its Amended and Restated Non-Employee Director Long-Term Incentive Plan, as well as the dilutive effect of accelerated share repurchase agreements, if applicable. Earnings allocable to participating securities include the portion of dividends declared as well as the portion of undistributed earnings during the period allocable to participating securities. New Accounting Standards to be Adopted In March 2020, the Financial Accounting Standards Board 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"). 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 update which the Financial Accounting Standards Board issued in December 2022, can be applied to contract modifications through December 31, 2024. To the extent that, prior to December 31, 2024, the Company enters into any contract modifications for which the optional expedients are applied, the adoption of this standard is not expected to have a material impact on the Company’s consolidated results of operations, financial position or cash flows.

EARNINGS PER SHARE

EARNINGS PER SHARE	3 Months Ended
EARNINGS PER SHARE	Mar. 31, 2023
Earnings Per Share [Abstract]
EARNINGS (LOSS) PER SHARE	EARNINGS PER SHARE The computation of basic and diluted earnings per common share was as follows (in millions, except per share data): Three Months Ended March 31, 2023 2022 Amounts attributable to Quest Diagnostics’ common stockholders: Net income attributable to Quest Diagnostics $ 202 $ 355 Less: Earnings allocated to participating securities 1 1 Earnings available to Quest Diagnostics’ common stockholders – basic and diluted $ 201 $ 354 Weighted average common shares outstanding – basic 112 119 Effect of dilutive securities: Stock options and performance share units 1 2 Weighted average common shares outstanding – diluted 113 121 Earnings per share attributable to Quest Diagnostics’ common stockholders: Basic $ 1.80 $ 2.97 Diluted $ 1.78 $ 2.92 During both the three months ended March 31, 2023 and 2022, less than 1 million stock options and performance share units were not included in the calculation of diluted earnings per share due to their antidilutive effect.

RESTRUCTURING ACTIVITIES

RESTRUCTURING ACTIVITIES	3 Months Ended
RESTRUCTURING ACTIVITIES	Mar. 31, 2023
Restructuring and Related Activities [Abstract]
RESTRUCTURING ACTIVITIES	RESTRUCTURING ACTIVITIES Invigorate Program The Company is committed to a program called Invigorate which is designed to reduce its cost structure and improve performance. Invigorate consists of several flagship programs, with structured plans in each, to drive savings and improve performance across the customer value chain. These flagship programs include: organization excellence; information technology excellence; procurement excellence; field and customer service excellence; lab excellence; and revenue services excellence. In addition to these programs, the Company identified key themes to change how it operates including reducing denials and patient price concessions; further digitizing the business; standardization; automation and artificial intelligence; optimization and selecting and retaining talent. The Invigorate program is intended to offset reimbursement pressures and labor and benefit cost increases; free up additional resources to invest in innovation and other growth initiatives; and enable the Company to improve service quality and operating profitability. Restructuring Charges The Company's pre-tax restructuring charges for the three months ended March 31, 2023 and 2022 were $15 million and $2 million, respectively, entirely related to employee separation costs associated with various workforce reduction initiatives as the Company continued to restructure its organization. Of the total restructuring charges incurred during the three months ended March 31, 2023, $9 million, and $6 million were recorded in cost of services and selling, general and administrative expenses, respectively. Of the total restructuring charges incurred during the three months ended March 31, 2022, $1 million and $1 million were recorded in cost of services and selling, general and administrative expenses, respectively. Charges for all periods presented were primarily recorded in the Company's DIS business. The restructuring liability as of March 31, 2023 and December 31, 2022, which is included in accounts payable and accrued expenses, was $38 million and $44 million, respectively.

BUSINESS ACQUISITIONS

BUSINESS ACQUISITIONS	3 Months Ended
BUSINESS ACQUISITIONS	Mar. 31, 2023
Business Combinations [Abstract]
BUSINESS ACQUISITIONS	BUSINESS ACQUISITIONS During February 2023, the Company announced that it had entered into a definitive agreement to acquire select assets of the laboratory services business of New York-Presbyterian, which serves providers and patients in New York, as well as the Tri-State Area and beyond. The transaction closed during April 2023. See Note 15 for further discussion. For details regarding the Company's 2022 acquisitions, see Note 6 to the audited consolidated financial statements in the Company's 2022 Annual Report on Form 10-K.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
FAIR VALUE MEASUREMENTS	Mar. 31, 2023
Fair Value Disclosures [Abstract]
FAIR VALUE MEASUREMENTS	FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis: Basis of Fair Value Measurements Quoted Prices in Active Markets for Identical Assets/Liabilities Significant Other Observable Inputs Significant Unobservable Inputs March 31, 2023 Total Level 1 Level 2 Level 3 Assets: Deferred compensation trading securities $ 70 $ 70 $ — $ — Cash surrender value of life insurance policies 49 — 49 — Available-for-sale debt securities 2 — — 2 Total $ 121 $ 70 $ 49 $ 2 Liabilities: Deferred compensation liabilities $ 126 $ — $ 126 $ — Contingent consideration 5 — — 5 Total $ 131 $ — $ 126 $ 5 Redeemable noncontrolling interest $ 77 $ — $ — $ 77 Basis of Fair Value Measurements December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Deferred compensation trading securities $ 68 $ 68 $ — $ — Cash surrender value of life insurance policies 46 — 46 — Available-for-sale debt securities 2 — — 2 Total $ 116 $ 68 $ 46 $ 2 Liabilities: Deferred compensation liabilities $ 120 $ — $ 120 $ — Contingent consideration 23 — — 23 Total $ 143 $ — $ 120 $ 23 Redeemable noncontrolling interest $ 77 $ — $ — $ 77 A detailed description regarding the Company's fair value measurements is contained in Note 8 to the audited consolidated financial statements in the Company's 2022 Annual Report on Form 10-K. The Company offers certain employees the opportunity to participate in a non-qualified supplemental deferred compensation plan. A participant's deferrals, together with Company matching credits, are invested in a variety of participant-directed stock and bond mutual funds that are classified as trading securities. The trading securities are classified within Level 1 of the fair value hierarchy because the changes in the fair value of these securities are measured using quoted prices in active markets based on the market price per unit multiplied by the number of units held, exclusive of any transaction costs. A corresponding adjustment for changes in fair value of the trading securities is also reflected in the changes in fair value of the deferred compensation obligation. The deferred compensation liabilities are classified within Level 2 of the fair value hierarchy because their inputs are derived principally from observable market data by correlation to the trading securities. The Company offers certain employees the opportunity to participate in a non-qualified deferred compensation program. A participant's deferrals, together with Company matching credits, are “invested” at the direction of the employee in a hypothetical portfolio of investments which are tracked by an administrator. The Company purchases life insurance policies, with the Company named as beneficiary of the policies, for the purpose of funding the program's liability. Changes in the cash surrender value of the life insurance policies are based upon earnings and changes in the value of the underlying investments. Changes in the fair value of the deferred compensation obligation are derived using quoted prices in active markets based on the market price per unit multiplied by the number of units. The cash surrender value and the deferred compensation obligation are classified within Level 2 of the fair value hierarchy because their inputs are derived principally from observable market data by correlation to the hypothetical investments. Deferrals under the plan currently may only be made by participants who made deferrals under the plan in 2017. The Company's available-for-sale debt securities are measured at fair value using discounted cash flows. These fair value measurements are classified within Level 3 of the fair value hierarchy as the fair value is based on significant inputs that are not observable. Significant inputs include cash flows projections and a discount rate. In connection with previous acquisitions, the Company had contingent consideration obligations based on the achievement of certain testing volume and revenue benchmarks during 2022. See Note 8 to the audited consolidated financial statements in the Company's 2022 Annual Report on Form 10-K. The following table provides a reconciliation of the beginning and ending balances of liabilities using significant unobservable inputs (Level 3): Contingent Consideration Balance, December 31, 2022 $ 23 Settlements (18) Balance, March 31, 2023 $ 5 In connection with the sale of an 18.9% noncontrolling interest in a subsidiary to UMass Memorial Medical Center ("UMass") on July 1, 2015, the Company granted UMass the right to require the Company to purchase all of its interest in the subsidiary at fair value commencing July 1, 2020. As of March 31, 2023, the redeemable noncontrolling interest was presented at its fair value. The fair value measurement of the redeemable noncontrolling interest is classified within Level 3 of the fair value hierarchy because the fair value is based on a discounted cash flow analysis that takes into account, among other items, the joint venture's expected future cash flows, long term growth rates, and a discount rate commensurate with economic risk. The carrying amounts of cash and cash equivalents, accounts receivable, and accounts payable and accrued expenses approximate fair value based on the short maturities of these instruments. As of March 31, 2023 and December 31, 2022, the fair value of the Company’s debt was estimated at $3.8 billion and $3.7 billion, respectively. Principally all of the Company's debt is classified within Level 1 of the fair value hierarchy because the fair value of the debt is estimated based on rates currently offered to the Company with identical terms and maturities, using quoted active market prices and yields, taking into account the underlying terms of the debt instruments.

DEBT

DEBT	3 Months Ended
DEBT	Mar. 31, 2023
Debt Disclosure [Abstract]
DEBT	DEBT The Company is party to a $750 million senior unsecured revolving credit facility (the “Credit Facility” or "Senior Unsecured Revolving Credit Facility") which matures in November 2026. Under the Credit Facility, the Company can issue letters of credit totaling $150 million (see Note 11). Issued letters of credit reduce the available borrowing capacity under the Credit Facility. Interest on the Credit Facility is based on certain published rates plus an applicable margin based on changes in the Company's public debt ratings. The Credit Facility was amended during March 2023. Subsequent to such amendment, at the option of the Company, it may elect to lock into Term Secured Overnight Financing Rate (“Term SOFR”)-based interest rate contracts for periods up to six months. For interest on any U.S. Dollar-denominated outstanding amounts not covered under Term SOFR-based interest rate contracts, the Company can opt for an alternate base rate, which is calculated by reference to the prime rate, the federal funds rate or an adjusted Term SOFR rate. The Company also has the option to borrow in other currencies. As of March 31, 2023, the Company's borrowing rate for Term SOFR-based loans under the Credit Facility was adjusted Term SOFR plus 1.00%. The Credit Facility contains various covenants, including the maintenance of a financial leverage ratio, which could impact the Company's ability to, among other things, incur additional indebtedness. As of both March 31, 2023 and December 31, 2022, there were no outstanding borrowings under the Senior Unsecured Revolving Credit Facility.

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS	3 Months Ended
FINANCIAL INSTRUMENTS	Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
FINANCIAL INSTRUMENTS	FINANCIAL INSTRUMENTS The Company uses derivative financial instruments, from time to time, to manage its exposure to market risks for changes in interest rates and foreign currencies. This strategy includes the use of interest rate swap agreements, forward-starting interest rate swap agreements, interest rate lock agreements and foreign currency forward contracts to manage its exposure to movements in interest and currency rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. These policies prohibit holding or issuing derivative financial instruments for speculative purposes. The Company does not enter into derivative financial instruments that contain credit-risk-related contingent features or requirements to post collateral. Interest Rate Risk The Company is exposed to interest rate risk on its cash and cash equivalents and its debt obligations. Interest income earned on cash and cash equivalents may fluctuate as interest rates change; however, due to their relatively short maturities, the Company does not hedge these assets or their investment cash flows and the impact of interest rate risk is not material. The Company's debt obligations consist of fixed-rate and, from time to time, variable-rate debt instruments. The Company's primary objective is to achieve the lowest overall cost of funding while managing the variability in cash outflows within an acceptable range. In order to achieve this objective, the Company has historically entered into interest rate swap agreements. Interest rate swaps involve the periodic exchange of payments without the exchange of underlying principal or notional amounts. Net settlements between the counterparties are recognized as an adjustment to interest expense, net. Interest Rate Derivatives – Cash Flow Hedges From time to time, the Company has entered into various interest rate lock agreements and forward-starting interest rate swap agreements to hedge part of the Company's interest rate exposure associated with the variability in future cash flows attributable to changes in interest rates. Interest Rate Derivatives – Fair Value Hedges Historically, the Company has entered into various fixed-to-variable interest rate swap agreements in order to convert a portion of the Company's long-term debt into variable interest rate debt. All such fixed-to-variable interest rate swap agreements have been terminated and proceeds from the terminations have been reflected as basis adjustments to the hedged debt instruments and are being amortized as a reduction of interest expense, net over the remaining terms of such debt instruments. As of March 31, 2023 and December 31, 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 March 31, 2023 December 31, 2022 Long-term debt $ 23 $ 26 (a) As of both March 31, 2023 and December 31, 2022, the entire balance is associated with remaining unamortized hedging adjustments on discontinued relationships.

STOCKHOLDERS_ EQUITY AND REDEEM

STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST	3 Months Ended
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST	Mar. 31, 2023
Stockholders' Equity Attributable to Parent [Abstract]
STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST	STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST Stockholders' Equity 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 8); and • Net changes in available-for-sale debt securities, which represent unrealized holding gains (losses), net of tax, on available-for-sale debt securities. For the three months ended March 31, 2023 and 2022, 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 the first quarter of 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.71 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. Share Repurchase Program In February 2023, the Company's Board of Directors increased the size of its share repurchase program by $1 billion. As of March 31, 2023, $1.3 billion remained available under the Company’s share repurchase authorization. The share repurchase authorization has no set expiration or termination date. Share Repurchases For the three months ended March 31, 2023, the Company repurchased no shares of its common stock. For the three months ended March 31, 2022, the Company repurchased 2.6 million shares of its common stock for $350 million. Shares Reissued from Treasury Stock For the three months ended March 31, 2023 and 2022, the Company reissued 0.7 million shares and 0.5 million shares, respectively, from treasury stock under its Employee Stock Purchase Plan and its stock-based compensation program. For details regarding the Company's stock ownership and compensation plans, see Note 18 to the audited consolidated financial statements in the Company's 2022 Annual Report on Form 10-K. Redeemable Noncontrolling Interest In connection with the sale of an 18.9% noncontrolling interest in a subsidiary to UMass on July 1, 2015, the Company granted UMass the right to require the Company to purchase all of its interest in the subsidiary at fair value commencing July 1, 2020. The subsidiary performs diagnostic information services in a defined territory within the state of Massachusetts. Since the redemption of the noncontrolling interest is outside of the Company's control, it has been presented outside of stockholders' equity at the greater of its carrying amount or its fair value. As of March 31, 2023 and December 31, 2022, the redeemable noncontrolling interest was presented at its fair value. For further details regarding the fair value of the redeemable noncontrolling interest, see Note 6.

SUPPLEMENTAL CASH FLOW & OTHER

SUPPLEMENTAL CASH FLOW & OTHER DATA	3 Months Ended
SUPPLEMENTAL CASH FLOW & OTHER DATA	Mar. 31, 2023
Supplemental Cash Flow Elements [Abstract]
SUPPLEMENTAL CASH FLOW & OTHER DATA	SUPPLEMENTAL CASH FLOW AND OTHER DATA Supplemental cash flow and other data for the three months ended March 31, 2023 and 2022 was as follows: Three Months Ended March 31, 2023 2022 Depreciation expense $ 81 $ 79 Amortization expense 26 27 Depreciation and amortization expense $ 107 $ 106 Interest expense $ (37) $ (37) Interest income 2 — Interest expense, net $ (35) $ (37) Interest paid $ 32 $ 32 Income taxes paid $ 33 $ 23 Accounts payable associated with capital expenditures $ 22 $ 22 Dividends payable $ 80 $ 78 Businesses acquired: Fair value of assets acquired $ 31 $ 142 Fair value of liabilities assumed — 15 Fair value of net assets acquired 31 127 Merger consideration payable — (18) Cash paid for business acquisitions 31 109 Less: Cash acquired — 4 Business acquisitions, net of cash acquired $ 31 $ 105 Leases: Leased assets obtained in exchange for new operating lease liabilities $ 44 $ 63

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
COMMITMENTS AND CONTINGENCIES	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Letters of Credit The Company can issue letters of credit totaling $100 million under its $525 million secured receivables credit facility and $150 million under its $750 million senior unsecured revolving credit facility. For further discussion regarding the Company's secured receivables credit facility and senior unsecured revolving credit facility, see Note 14 to the audited consolidated financial statements in the Company's 2022 Annual Report on Form 10-K and Note 7 above. In support of its risk management program, $70 million in letters of credit under the secured receivables credit facility were outstanding as of March 31, 2023, providing collateral for current and future automobile liability and workers’ compensation loss payments. Contingent Lease Obligations The Company remains subject to contingent obligations under certain real estate leases for which no liability has been recorded. For further details, see Note 19 to the audited consolidated financial statements in the Company’s 2022 Annual Report on Form 10-K. Certain Legal Matters The Company may incur losses associated with these proceedings and investigations, but it is not possible to estimate the amount of loss or range of loss, if any, that might result from adverse judgments, settlements, fines, penalties, or other resolution of these proceedings and investigations based on the stage of these proceedings and investigations, the absence of specific allegations as to alleged damages, the uncertainty as to the certification of a class or classes and the size of any certified class, if applicable, and/or the lack of resolution of significant factual and legal issues. The Company has insurance coverage rights in place (limited in amount; subject to deductible) for certain potential costs and liabilities related to these proceedings and investigations. 401(k) Plan Lawsuit In 2020, two putative class action lawsuits were filed in the U.S. District Court for New Jersey against the Company and other defendants with respect to the Company’s 401(k) plan. The complaint alleges, among other things, that the fiduciaries of the 401(k) plan breached their duties by failing to disclose the expenses and risks of plan investment options, allowing unreasonable administration expenses to be charged to plan participants, and selecting and retaining high cost and poor performing investments. In October 2020, the court consolidated the two lawsuits under the caption In re: Quest Diagnostics ERISA Litigation and plaintiffs filed a consolidated amended complaint. In May 2021, the court denied the Company's motion to dismiss the complaint. Discovery is proceeding. AMCA Data Security Incident On June 3, 2019, the Company reported that Retrieval-Masters Creditors Bureau, Inc./American Medical Collection Agency (“AMCA”) had informed the Company and Optum360 LLC that an unauthorized user had access to AMCA’s system between August 1, 2018 and March 30, 2019 (the “AMCA Data Security Incident”). Optum360 provides revenue management services to the Company, and AMCA provided debt collection services to Optum360. AMCA first informed the Company of the AMCA Data Security Incident on May 14, 2019. AMCA’s affected system included financial information (e.g., credit card numbers and bank account information), medical information and other personal information (e.g., social security numbers). Test results were not included. Neither Optum360’s nor the Company’s systems or databases were involved in the incident. AMCA also informed the Company that information pertaining to other laboratories’ customers was also affected. Following announcement of the AMCA Data Security Incident, AMCA sought protection under the U.S. bankruptcy laws. The bankruptcy proceeding has been dismissed. Numerous putative class action lawsuits were filed against the Company related to the AMCA Data Security Incident. The U.S. Judicial Panel on Multidistrict Litigation transferred the cases that were then still pending to, and consolidated them for pre-trial proceedings in, the U.S. District Court for New Jersey. In November 2019, the plaintiffs in the multidistrict proceeding filed a consolidated putative class action complaint against the Company and Optum360 that named additional individuals as plaintiffs and that asserted a variety of common law and statutory claims in connection with the AMCA Data Security Incident. In January 2020, the Company moved to dismiss the consolidated complaint; the motion to dismiss was granted in part and denied in part. Plaintiffs filed an amended complaint, which the Company also moved to dismiss. The motion is pending. Plaintiffs also filed a motion to further amend the complaint. The Company opposed the motion. Discovery is proceeding. In addition, the Company has been notified that numerous state attorney general offices were investigating or otherwise seeking information and/or documents, and that certain U.S. senators were seeking information, from the Company related to the AMCA Data Security Incident. ReproSource Fertility Diagnostics, Inc. ReproSource Fertility Diagnostics, Inc. (“ReproSource”), a subsidiary of the Company, is subject to two putative class action lawsuits in the U.S. District Court for Massachusetts: Bickham v. ReproSource Fertility Diagnostics, Inc. and Gordon v. ReproSource Fertility Diagnostics, Inc. The class actions are related to a data security incident that occurred in August 2021 in which an unauthorized party may have accessed or acquired protected health information and personally identifiable information of ReproSource patients. The complaints generally allege that ReproSource, among other claims, failed to adequately safeguard customers’ private information. The Company moved to dismiss both complaints. A third putative class action pertaining to the same data security incident, Trouville v. ReproSource Fertility Diagnostics, Inc., was filed in California state court. The Company removed the case to federal court and moved to dismiss and/or transfer it to U.S. District Court for Massachusetts. Cole, et. al v. 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. District Court for the Eastern District of California, for allegedly conspiring with Facebook to track customers’ internet communications on Company web platforms without authorization, in violation of the California Invasion of Privacy Act and the California Confidentiality of Medical Information Act . 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 Company filed a motion to dismiss the amended complaint, which is pending. Other Legal Matters In the normal course of business, the Company has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with the Company's activities as a provider of diagnostic testing, information and services. These actions could involve claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages, and could have an adverse impact on the Company's client base and reputation. The Company is also involved, from time to time, in other reviews, investigations and proceedings by governmental agencies regarding the Company's business which may result in adverse judgments, settlements, fines, penalties, injunctions or other relief. The federal or state governments may bring claims based on the Company's current practices, which it believes are lawful. In addition, certain federal and state statutes, including the qui tam provisions of the federal False Claims Act, allow private individuals to bring lawsuits against healthcare companies on behalf of government or private payers. The Company is aware of lawsuits, and from time to time has received subpoenas, related to billing or other practices based on the False Claims Act or other federal and state statutes, regulations or other laws. The Company understands that there may be other pending qui tam claims brought by former employees or other "whistleblowers" as to which the Company cannot determine the extent of any potential liability. Management cannot predict the outcome of such matters. Although management does not anticipate that the ultimate outcome of such matters will have a material adverse effect on the Company's financial condition, given the high degree of judgment involved in establishing loss estimates related to these types of matters, the outcome of such matters may be material to the Company's consolidated results of operations or cash flows in the period in which the impact of such matters is determined or paid. These matters are in different stages. Some of these matters are in their early stages. Matters may involve responding to and cooperating with various government investigations and related subpoenas. As of March 31, 2023, the Company does not believe that material losses related to legal matters are probable. Reserves for legal matters totaled $1 million and $2 million as of March 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. Any professional liability litigation could also have an adverse impact on the Company's client base and reputation. The Company maintains various liability insurance coverages for, among other things, claims that could result from providing, or failing to provide, clinical testing services, including inaccurate testing results, and other exposures. The Company's insurance coverage limits its maximum exposure on individual claims; however, the Company is essentially self-insured for a significant portion of these claims. The Company is subject to a series of individual claims brought by persons in Ireland related to allegations stemming from pap smear screening services performed by the Company. In general, claimants have alleged that the results of certain pap smear screening tests performed by the Company and other providers, pursuant to a program coordinated by the Irish government, were incorrect for individuals who were later diagnosed with cervical cancer. The Irish government and an independent scoping inquiry commissioned by the Irish government found that the Company’s performance of its screening services for the Irish cervical cancer screening program were in accordance with both Ireland’s requirements and international standards. The Company has settled claims made by certain individuals, is a party in multiple lawsuits and may be served as a party in additional lawsuits. The Company does not believe that the resolution of existing or future claims will have a material adverse effect on its financial position or liquidity, but the ultimate outcomes of these claims are unpredictable and subject to significant uncertainties. Reserves for such matters, including those associated with both asserted and incurred but not reported claims, are established on an undiscounted basis by considering actuarially determined losses based upon the Company's historical and projected loss experience. Such reserves totaled $168 million and $169 million as of March 31, 2023 and December 31, 2022, respectively. While the basis for claims reserves is actuarially determined losses based upon the Company's historical and projected loss experience, the process of analyzing, assessing and establishing reserve estimates relative to these types of claims involves a high degree of judgment. Although the Company believes that its present reserves and insurance coverage are sufficient to cover currently estimated exposures, it is possible that the Company may incur liabilities in excess of its recorded reserves or insurance coverage. Changes in the facts and circumstances associated with claims could have a material impact on the Company’s results of operations (principally costs of services), cash flows and financial condition in the period that reserve estimates are adjusted or paid.

BUSINESS SEGMENT INFORMATION

BUSINESS SEGMENT INFORMATION	3 Months Ended
BUSINESS SEGMENT INFORMATION	Mar. 31, 2023
Segment Reporting [Abstract]
BUSINESS SEGMENT INFORMATION	BUSINESS SEGMENT INFORMATION The Company's DIS business is the only reportable segment based on the manner in which the Chief Executive Officer, who is the Company's chief operating decision maker ("CODM"), assesses performance and allocates resources across the organization. The DIS business provides diagnostic information services to a broad range of customers, including patients, clinicians, hospitals, IDNs, health plans, employers, customers, and ACOs. The Company is the world's leading provider of diagnostic information services, which includes providing information and insights based on the industry-leading menu of routine, non-routine and advanced clinical testing and anatomic pathology testing, and other diagnostic information services. The DIS business accounted for greater than 95% of net revenues in 2023 and 2022. All other operating segments include the Company's DS businesses, which consist of its risk assessment services and healthcare information technology businesses. The Company's DS businesses are the leading provider of risk assessment services for the life insurance industry and offer healthcare organizations and clinicians robust information technology solutions. As of March 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. The following table is a summary of segment information for the three months ended March 31, 2023 and 2022. Segment asset information is not presented since it is not used by the CODM at the operating segment level. Operating earnings (loss) of each segment represents net revenues less directly identifiable expenses to arrive at operating income (loss) for the segment. General corporate activities included in the table below are comprised of general management and administrative corporate expenses, amortization and impairment of intangible assets and other operating income and expenses, net of certain general corporate activity costs that are allocated to the DIS and DS businesses. The accounting policies of the segments are the same as those of the Company as set forth in Note 2 to the audited consolidated financial statements contained in the Company’s 2022 Annual Report on Form 10-K and Note 2 to the interim unaudited consolidated financial statements. Three Months Ended March 31, 2023 2022 Net revenues: DIS business $ 2,259 $ 2,541 All other operating segments 72 70 Total net revenues $ 2,331 $ 2,611 Operating earnings (loss): DIS business $ 374 $ 562 All other operating segments 8 7 General corporate activities (77) (56) Total operating income 305 513 Non-operating expense, net (28) (61) Income before income taxes and equity in earnings of equity method investees 277 452 Income tax expense (65) (110) Equity in earnings of equity method investees, net of taxes 5 31 Net income 217 373 Less: Net income attributable to noncontrolling interests 15 18 Net income attributable to Quest Diagnostics $ 202 $ 355 The approximate percentage of net revenues by major service for the three months ended March 31, 2023 and 2022 were as follows: Three Months Ended March 31, 2023 2022 Routine clinical testing and other services 49 % 41 % COVID-19 testing services 5 23 Gene-based and esoteric (including advanced diagnostics) testing services 37 28 Anatomic pathology testing services 6 5 All other 3 3 Net revenues 100 % 100 %

REVENUE RECOGNITION

REVENUE RECOGNITION	3 Months Ended
REVENUE RECOGNITION	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
REVENUE RECOGITION	REVENUE RECOGNITION DIS Net revenues in the Company’s DIS business accounted for over 95% of the Company’s total net revenues for the three months ended March 31, 2023 and 2022 and are primarily comprised of a high volume of relatively low-dollar transactions. The DIS business, which provides clinical testing services and other services, satisfies its performance obligations and recognizes revenues primarily upon completion of the testing process (when results are reported) or when services have been rendered. The Company estimates the amount of consideration it expects to be entitled to receive from customer groups in exchange for providing services using the portfolio approach. These estimates include the impact of contractual allowances (including payer denials), and patient price concessions. 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. For further details regarding revenue recognition in the Company's DIS business, see Note 3 to the audited consolidated financial statements in the Company's 2022 Annual Report on Form 10-K. DS The Company’s DS businesses primarily satisfy their performance obligations and recognize revenues when delivery has occurred or services have been rendered. Net Revenue and Net Accounts Receivable by Customer Type The approximate percentage of net revenue by type of customer was as follows: Three Months Ended March 31, 2023 2022 Healthcare insurers: Fee-for-service 37 % 39 % Capitated 3 2 Total healthcare insurers 40 41 Government payers 12 11 Client payers 33 32 Patients (including coinsurance and deductible responsibilities) 12 13 Total DIS 97 97 DS 3 3 Net revenues 100 % 100 % The approximate percentage of net accounts receivable by type of customer was as follows: March 31, 2023 December 31, 2022 Healthcare Insurers 29 % 28 % Government Payers 7 6 Client Payers 43 44 Patients (including coinsurance and deductible responsibilities) 17 18 Total DIS 96 96 DS 4 4 Net accounts receivable 100 % 100 %

TAXES ON INCOME

TAXES ON INCOME	3 Months Ended
TAXES ON INCOME	Mar. 31, 2023
Income Tax Disclosure [Abstract]
TAXES ON INCOME	TAXES ON INCOME For the three months ended March 31, 2023 and 2022, the effective income tax rate was 23.6% and 24.4%, respectively. The effective income tax rates benefited from $5 million of excess tax benefits associated with stock-based compensation arrangements for both the three months ended March 31, 2023 and 2022.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
SUBSEQUENT EVENTS	Mar. 31, 2023
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTS On April 17, 2023, the Company completed the previously announced acquisition of select assets of the laboratory services business of New York-Presbyterian, which serves providers and patients in New York, as well as the Tri-State Area and beyond, in an all-cash transaction for $275 million. The acquisition will be accounted for as a business combination. The Company is in the process of completing the preliminary purchase price allocation of the assets acquired and liabilities assumed. During April 2023, the Company announced that it had entered into a definitive agreement to acquire Haystack Oncology, Inc., an early-stage oncology company focused on minimal residual disease testing to aid in the early, accurate detection of residual or recurring cancer and better inform therapy decisions. Under the terms of the agreement, the Company would pay approximately $300 million in cash at closing, net of cash acquired. Additionally, it would pay up to $150 million of additional consideration, which is contingent upon achieving future performance milestones and which is not expected to be paid during 2023. The transaction is expected to close during the second quarter of 2023 and remains subject to customary closing conditions. The Company expects to fund the cash at closing for the acquisitions noted above through a combination of cash on hand and borrowings under the Company's existing credit facilities.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Presentation	The interim unaudited consolidated financial statements reflect all adjustments which in the opinion of management are necessary for a fair statement of results of operations, comprehensive income, financial condition, cash flows and stockholders' equity for the periods presented. Except as otherwise disclosed, all such adjustments are of a normal recurring nature. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the full year. These interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s 2022 Annual Report on Form 10-K. The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2022 but does not include all the disclosures required by accounting principles generally accepted in the United States (“GAAP”).
Use Of Estimates	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Earnings Per Share	The Company's unvested restricted stock units that contain non-forfeitable rights to dividends are participating securities and, therefore, are included in the earnings allocation in computing earnings per share using the two-class method. Basic earnings per common share is calculated by dividing net income attributable to Quest Diagnostics, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding. Diluted earnings per common share is calculated by dividing net income attributable to Quest Diagnostics, adjusted for earnings allocated to participating securities, by the weighted average number of common shares outstanding after giving effect to all potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include the dilutive effect of outstanding stock options and performance share units granted under the Company's Amended and Restated Employee Long-Term Incentive Plan and outstanding stock options granted under its Amended and Restated Non-Employee Director Long-Term Incentive Plan, as well as the dilutive effect of accelerated share repurchase agreements, if applicable. Earnings allocable to participating securities include the portion of dividends declared as well as the portion of undistributed earnings during the period allocable to participating securities.
New Accounting Standards to be Adopted	In March 2020, the Financial Accounting Standards Board 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"). 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 update which the Financial Accounting Standards Board issued in December 2022, can be applied to contract modifications through December 31, 2024. To the extent that, prior to December 31, 2024, the Company enters into any contract modifications for which the optional expedients are applied, the adoption of this standard is not expected to have a material impact on the Company’s consolidated results of operations, financial position or cash flows.
Derivative Financial Instruments	The Company uses derivative financial instruments, from time to time, to manage its exposure to market risks for changes in interest rates and foreign currencies. This strategy includes the use of interest rate swap agreements, forward-starting interest rate swap agreements, interest rate lock agreements and foreign currency forward contracts to manage its exposure to movements in interest and currency rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. These policies prohibit holding or issuing derivative financial instruments for speculative purposes. The Company does not enter into derivative financial instruments that contain credit-risk-related contingent features or requirements to post collateral. Interest Rate Risk The Company is exposed to interest rate risk on its cash and cash equivalents and its debt obligations. Interest income earned on cash and cash equivalents may fluctuate as interest rates change; however, due to their relatively short maturities, the Company does not hedge these assets or their investment cash flows and the impact of interest rate risk is not material. The Company's debt obligations consist of fixed-rate and, from time to time, variable-rate debt instruments. The Company's primary objective is to achieve the lowest overall cost of funding while managing the variability in cash outflows within an acceptable range. In order to achieve this objective, the Company has historically entered into interest rate swap agreements. Interest rate swaps involve the periodic exchange of payments without the exchange of underlying principal or notional amounts. Net settlements between the counterparties are recognized as an adjustment to interest expense, net.

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	3 Months Ended
EARNINGS PER SHARE (Tables)	Mar. 31, 2023
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	The computation of basic and diluted earnings per common share was as follows (in millions, except per share data): Three Months Ended March 31, 2023 2022 Amounts attributable to Quest Diagnostics’ common stockholders: Net income attributable to Quest Diagnostics $ 202 $ 355 Less: Earnings allocated to participating securities 1 1 Earnings available to Quest Diagnostics’ common stockholders – basic and diluted $ 201 $ 354 Weighted average common shares outstanding – basic 112 119 Effect of dilutive securities: Stock options and performance share units 1 2 Weighted average common shares outstanding – diluted 113 121 Earnings per share attributable to Quest Diagnostics’ common stockholders: Basic $ 1.80 $ 2.97 Diluted $ 1.78 $ 2.92

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
FAIR VALUE MEASUREMENTS (Tables)	Mar. 31, 2023
Fair Value Disclosures [Abstract]
Fair Value, Measurement Inputs	The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis: Basis of Fair Value Measurements Quoted Prices in Active Markets for Identical Assets/Liabilities Significant Other Observable Inputs Significant Unobservable Inputs March 31, 2023 Total Level 1 Level 2 Level 3 Assets: Deferred compensation trading securities $ 70 $ 70 $ — $ — Cash surrender value of life insurance policies 49 — 49 — Available-for-sale debt securities 2 — — 2 Total $ 121 $ 70 $ 49 $ 2 Liabilities: Deferred compensation liabilities $ 126 $ — $ 126 $ — Contingent consideration 5 — — 5 Total $ 131 $ — $ 126 $ 5 Redeemable noncontrolling interest $ 77 $ — $ — $ 77 Basis of Fair Value Measurements December 31, 2022 Total Level 1 Level 2 Level 3 Assets: Deferred compensation trading securities $ 68 $ 68 $ — $ — Cash surrender value of life insurance policies 46 — 46 — Available-for-sale debt securities 2 — — 2 Total $ 116 $ 68 $ 46 $ 2 Liabilities: Deferred compensation liabilities $ 120 $ — $ 120 $ — Contingent consideration 23 — — 23 Total $ 143 $ — $ 120 $ 23 Redeemable noncontrolling interest $ 77 $ — $ — $ 77
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation	The following table provides a reconciliation of the beginning and ending balances of liabilities using significant unobservable inputs (Level 3): Contingent Consideration Balance, December 31, 2022 $ 23 Settlements (18) Balance, March 31, 2023 $ 5

FINANCIAL INSTRUMENTS (Tables)

FINANCIAL INSTRUMENTS (Tables)	3 Months Ended
FINANCIAL INSTRUMENTS (Tables)	Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Debt Instrument Fair Value Basis Adjustment Attributable to Hedged Debt	As of March 31, 2023 and December 31, 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 March 31, 2023 December 31, 2022 Long-term debt $ 23 $ 26 (a) As of both March 31, 2023 and December 31, 2022, the entire balance is associated with remaining unamortized hedging adjustments on discontinued relationships.

SUPPLEMENTAL CASH FLOW & OTHE_2

SUPPLEMENTAL CASH FLOW & OTHER DATA (Tables)	3 Months Ended
SUPPLEMENTAL CASH FLOW & OTHER DATA (Tables)	Mar. 31, 2023
Supplemental Cash Flow Elements [Abstract]
Supplemental Cash Flow and Other Data	Supplemental cash flow and other data for the three months ended March 31, 2023 and 2022 was as follows: Three Months Ended March 31, 2023 2022 Depreciation expense $ 81 $ 79 Amortization expense 26 27 Depreciation and amortization expense $ 107 $ 106 Interest expense $ (37) $ (37) Interest income 2 — Interest expense, net $ (35) $ (37) Interest paid $ 32 $ 32 Income taxes paid $ 33 $ 23 Accounts payable associated with capital expenditures $ 22 $ 22 Dividends payable $ 80 $ 78 Businesses acquired: Fair value of assets acquired $ 31 $ 142 Fair value of liabilities assumed — 15 Fair value of net assets acquired 31 127 Merger consideration payable — (18) Cash paid for business acquisitions 31 109 Less: Cash acquired — 4 Business acquisitions, net of cash acquired $ 31 $ 105 Leases: Leased assets obtained in exchange for new operating lease liabilities $ 44 $ 63

BUSINESS SEGMENT INFORMATION (T

BUSINESS SEGMENT INFORMATION (Tables)	3 Months Ended
BUSINESS SEGMENT INFORMATION (Tables)	Mar. 31, 2023
Segment Reporting [Abstract]
Summary of Segment Reporting Information by Segment	The following table is a summary of segment information for the three months ended March 31, 2023 and 2022. Segment asset information is not presented since it is not used by the CODM at the operating segment level. Operating earnings (loss) of each segment represents net revenues less directly identifiable expenses to arrive at operating income (loss) for the segment. General corporate activities included in the table below are comprised of general management and administrative corporate expenses, amortization and impairment of intangible assets and other operating income and expenses, net of certain general corporate activity costs that are allocated to the DIS and DS businesses. The accounting policies of the segments are the same as those of the Company as set forth in Note 2 to the audited consolidated financial statements contained in the Company’s 2022 Annual Report on Form 10-K and Note 2 to the interim unaudited consolidated financial statements. Three Months Ended March 31, 2023 2022 Net revenues: DIS business $ 2,259 $ 2,541 All other operating segments 72 70 Total net revenues $ 2,331 $ 2,611 Operating earnings (loss): DIS business $ 374 $ 562 All other operating segments 8 7 General corporate activities (77) (56) Total operating income 305 513 Non-operating expense, net (28) (61) Income before income taxes and equity in earnings of equity method investees 277 452 Income tax expense (65) (110) Equity in earnings of equity method investees, net of taxes 5 31 Net income 217 373 Less: Net income attributable to noncontrolling interests 15 18 Net income attributable to Quest Diagnostics $ 202 $ 355
Schedule of Revenues by Major Service	by major service for the three months ended March 31, 2023 and 2022 were as follows: Three Months Ended March 31, 2023 2022 Routine clinical testing and other services 49 % 41 % COVID-19 testing services 5 23 Gene-based and esoteric (including advanced diagnostics) testing services 37 28 Anatomic pathology testing services 6 5 All other 3 3 Net revenues 100 % 100 %

REVENUE RECOGNITION (Tables)

REVENUE RECOGNITION (Tables)	3 Months Ended
REVENUE RECOGNITION (Tables)	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Disaggregation of Revenue	The approximate percentage of net revenue by type of customer was as follows: Three Months Ended March 31, 2023 2022 Healthcare insurers: Fee-for-service 37 % 39 % Capitated 3 2 Total healthcare insurers 40 41 Government payers 12 11 Client payers 33 32 Patients (including coinsurance and deductible responsibilities) 12 13 Total DIS 97 97 DS 3 3 Net revenues 100 % 100 %
Accounts Receivable Disaggregation	The approximate percentage of net accounts receivable by type of customer was as follows: March 31, 2023 December 31, 2022 Healthcare Insurers 29 % 28 % Government Payers 7 6 Client Payers 43 44 Patients (including coinsurance and deductible responsibilities) 17 18 Total DIS 96 96 DS 4 4 Net accounts receivable 100 % 100 %

EARNINGS PER SHARE (Details)

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Amounts attributable to Quest Diagnostics’ common stockholders:
Net income attributable to Quest Diagnostics	$ 202	$ 355
Less: Earnings allocated to participating securities	1	1
Earnings available to Quest Diagnostics’ common stockholders – basic and diluted	$ 201	$ 354
Weighted average common shares outstanding - basic	112	119
Stock options and performance share units	1	2
Weighted average common shares outstanding - diluted	113	121
Basic (in dollars per share)	$ 1.80	$ 2.97
Diluted (in dollars per share)	$ 1.78	$ 2.92
Antidilutive securities excluded from computation of earnings per share (less than)	1	1

RESTRUCTURING ACTIVITIES (Detai

RESTRUCTURING ACTIVITIES (Details) - Invigorate Program - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges	$ 15	$ 2
Accounts Payable and Accrued Liabilities
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	38		$ 44
Cost of services
Restructuring Cost and Reserve [Line Items]
Total restructuring charges	9	1
Selling, general and administrative
Restructuring Cost and Reserve [Line Items]
Total restructuring charges	$ 6	$ 1

FAIR VALUE MEASUREMENTS (Recogn

FAIR VALUE MEASUREMENTS (Recognized Assets and Liabilities at Fair Value) (Details) - Recurring Basis - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deferred compensation trading securities	$ 70	$ 68
Cash surrender value of life insurance policies	49	46
Available-for-sale debt securities	2	2
Total	121	116
Deferred compensation liabilities	126	120
Contingent consideration	5	23
Total	131	143
Redeemable noncontrolling interest	77	77
Quoted Prices in Active Markets for Identical Assets / Liabilities, Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deferred compensation trading securities	70	68
Cash surrender value of life insurance policies	0	0
Available-for-sale debt securities	0	0
Total	70	68
Deferred compensation liabilities	0	0
Contingent consideration	0	0
Total	0	0
Redeemable noncontrolling interest	0	0
Significant Other Observable Inputs, Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deferred compensation trading securities	0	0
Cash surrender value of life insurance policies	49	46
Available-for-sale debt securities	0	0
Total	49	46
Deferred compensation liabilities	126	120
Contingent consideration	0	0
Total	126	120
Significant Unobservable Inputs, Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Deferred compensation trading securities	0	0
Cash surrender value of life insurance policies	0	0
Available-for-sale debt securities	2	2
Total	2	2
Deferred compensation liabilities	0	0
Contingent consideration	5	23
Total	5	23
Redeemable noncontrolling interest	$ 77	$ 77

FAIR VALUE MEASUREMENTS (Reconc

FAIR VALUE MEASUREMENTS (Reconciliation of Beginning and Ending Balances of Assets and Liabilities Unobservable Inputs) (Details) - Significant Unobservable Inputs, Level 3 - Contingent Consideration $ in Millions	3 Months Ended
	Mar. 31, 2023 USD ($)
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance, December 31, 2022	$ 23
Settlements	(18)
Balance, March 31, 2023	$ 5

FAIR VALUE MEASUREMENTS (Narrat

FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Billions	Mar. 31, 2023	Dec. 31, 2022	Jul. 01, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of debt	$ 3.8	$ 3.7
UMass Joint Venture
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Ownership percentage by noncontrolling owners			18.90%

DEBT (Details)

DEBT (Details) - Senior Unsecured Revolving Credit Facility - USD ($)	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022	Nov. 30, 2021
Debt Instrument [Line Items]
Credit facility capacity	$ 750,000,000		$ 750,000,000
Amount outstanding	$ 0	$ 0
Term SOFR
Debt Instrument [Line Items]
Interest rate	1%
Letter of Credit
Debt Instrument [Line Items]
Credit facility capacity	$ 150,000,000		$ 150,000,000

FINANCIAL INSTRUMENTS (Balance

FINANCIAL INSTRUMENTS (Balance Sheets) (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Long-term Debt \| Fair Value Hedging
Derivative [Line Items]
Hedge Accounting Basis Adjustment	$ 23	$ 26

STOCKHOLDERS_ EQUITY AND REDE_2

STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST (Details) - USD ($) $ / shares in Units, shares in Millions		3 Months Ended
	Feb. 01, 2023	Mar. 31, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Jul. 01, 2015
Schedule of Stockholders' Equity and Redeemable Noncontrolling Interest [Line Items]
Dividends per common share		$ 0.71	$ 0.66	$ 0.66	$ 0.66	$ 0.66
Additional amount authorized	$ 1,000,000,000
Share repurchase authorization remaining available		$ 1,300,000,000
Purchases of treasury stock, value						$ 350,000,000
Reissuance of shares for employee benefit plan		0.7				0.5
UMass Joint Venture
Schedule of Stockholders' Equity and Redeemable Noncontrolling Interest [Line Items]
Ownership percentage by noncontrolling owners							18.90%
Treasury Stock, at Cost
Schedule of Stockholders' Equity and Redeemable Noncontrolling Interest [Line Items]
Purchases of treasury stock- shares		0				2.6
Purchases of treasury stock, value						$ 350,000,000

SUPPLEMENTAL CASH FLOW & OTHE_3

SUPPLEMENTAL CASH FLOW & OTHER DATA (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Supplemental Cash Flow Elements [Abstract]
Depreciation expense	$ 81	$ 79
Amortization expense	26	27
Depreciation and amortization expense	107	106
Interest expense	(37)	(37)
Interest income	2	0
Interest expense, net	(35)	(37)
Interest paid	32	32
Income taxes paid	33	23
Accounts payable associated with capital expenditures	22	22
Dividends payable	80	78
Fair value of assets acquired	31	142
Fair value of liabilities assumed	0	15
Fair value of net assets acquired	31	127
Merger consideration payable	0	(18)
Cash paid for business acquisitions	31	109
Less: Cash acquired	0	4
Business acquisitions, net of cash acquired	31	105
Leases:
Leased assets obtained in exchange for new operating lease liabilities	$ 44	$ 63

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details)	Mar. 31, 2023 USD ($) claim	Dec. 31, 2022 USD ($)	Nov. 30, 2021 USD ($)	Dec. 31, 2020 claim	Oct. 31, 2020 claim
Debt Instrument [Line Items]
Self-insurance reserves	$ 168,000,000	$ 169,000,000
Excludes general and professional liability claims
Loss Contingencies [Line Items]
Litigation reserves	1,000,000	$ 2,000,000
Secured Receivables Credit Facility
Debt Instrument [Line Items]
Credit facility capacity	525,000,000
Letters of credit outstanding, amount	70,000,000
Secured Receivables Credit Facility \| Letter of Credit
Debt Instrument [Line Items]
Credit facility capacity	100,000,000
Senior Unsecured Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility capacity	750,000,000		$ 750,000,000
Senior Unsecured Revolving Credit Facility \| Letter of Credit
Debt Instrument [Line Items]
Credit facility capacity	$ 150,000,000		$ 150,000,000
401(k) Plan Lawsuit \| Pending Litigation
Loss Contingencies [Line Items]
Class action lawsuits \| claim				2	2
Data Security Incident \| Pending Litigation
Loss Contingencies [Line Items]
Class action lawsuits \| claim	2

BUSINESS SEGMENT INFORMATION (D

BUSINESS SEGMENT INFORMATION (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Segment Reporting Information [Line Items]
Percentage of net revenues	100%	100%
Total net revenues	$ 2,331	$ 2,611
Total operating income	305	513
Non-operating expense, net	(28)	(61)
Income before income taxes and equity in earnings of equity method investees	277	452
Income tax expense	(65)	(110)
Equity in earnings of equity method investees, net of taxes	5	31
Net income	217	373
Less: Net income attributable to noncontrolling interests	15	18
Net income attributable to Quest Diagnostics	$ 202	$ 355
Total net revenues, percent	100%	100%
Routine clinical testing services
Segment Reporting Information [Line Items]
Total net revenues, percent	49%	41%
COVID-19 Testing Services
Segment Reporting Information [Line Items]
Total net revenues, percent	5%	23%
Gene-based and esoteric testing services
Segment Reporting Information [Line Items]
Total net revenues, percent	37%	28%
Anatomic pathology testing services
Segment Reporting Information [Line Items]
Total net revenues, percent	6%	5%
All other services
Segment Reporting Information [Line Items]
Total net revenues, percent	3%	3%
DIS business
Segment Reporting Information [Line Items]
Percentage of net revenues	97%	97%
Total net revenues	$ 2,259	$ 2,541
Total operating income	$ 374	$ 562
DIS business \| Minimum
Segment Reporting Information [Line Items]
Percentage of net revenues	95%	95%
All other operating segments
Segment Reporting Information [Line Items]
Total net revenues	$ 72	$ 70
Total operating income	8	7
General corporate activities
Segment Reporting Information [Line Items]
Total operating income	$ (77)	$ (56)

REVENUE RECOGNITION (Details)

REVENUE RECOGNITION (Details)	3 Months Ended
REVENUE RECOGNITION (Details)	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Percentage of net revenues	100%	100%
Net accounts receivable	100%		100%
DIS business
Segment Reporting Information [Line Items]
Percentage of net revenues	97%	97%
Net accounts receivable	96%		96%
DIS business \| Healthcare Insurers
Segment Reporting Information [Line Items]
Percentage of net revenues	40%	41%
Net accounts receivable	29%		28%
DIS business \| Healthcare Insurers \| Fee-for-service
Segment Reporting Information [Line Items]
Percentage of net revenues	37%	39%
DIS business \| Healthcare Insurers \| Capitated
Segment Reporting Information [Line Items]
Percentage of net revenues	3%	2%
DIS business \| Government Payers
Segment Reporting Information [Line Items]
Percentage of net revenues	12%	11%
Net accounts receivable	7%		6%
DIS business \| Client Payers
Segment Reporting Information [Line Items]
Percentage of net revenues	33%	32%
Net accounts receivable	43%		44%
DIS business \| Patients (including coinsurance and deductible responsibilities)
Segment Reporting Information [Line Items]
Percentage of net revenues	12%	13%
Net accounts receivable	17%		18%
DIS business \| Minimum
Segment Reporting Information [Line Items]
Percentage of net revenues	95%	95%
All other operating segments \| DS Businesses
Segment Reporting Information [Line Items]
Percentage of net revenues	3%	3%
Net accounts receivable	4%		4%

TAXES ON INCOME (Details)

TAXES ON INCOME (Details) - USD ($) $ in Millions	3 Months Ended
TAXES ON INCOME (Details) - USD ($) $ in Millions	Mar. 31, 2023	Mar. 31, 2022
Income Tax Disclosure [Abstract]
Effective income tax rate	23.60%	24.40%
Share-based compensation, excess tax benefit, amount	$ 5	$ 5

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended
SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions	Apr. 17, 2023	Apr. 28, 2023	Mar. 31, 2023	Mar. 31, 2022
Subsequent Event [Line Items]
Cash paid for business acquisitions			$ 31	$ 109
Subsequent Event \| New York-Presbyterian
Subsequent Event [Line Items]
Cash paid for business acquisitions	$ 275
Subsequent Event \| Haystack Oncology, Inc. \| Plan
Subsequent Event [Line Items]
Cash paid for business acquisitions		$ 300
Maximum contingent consideration payment		$ 150