PREFERRED STOCK AND COMMON STOCKHOLDERS’ EQUITY

Series Preferred Stock

Quest Diagnostics is authorized to issue up to 10 million shares of Series Preferred Stock, par value $1.00 per share. The Company's Board of Directors has the authority to issue such shares without stockholder approval and to determine the designations, preferences, rights and restrictions of such shares. Of the authorized shares, 1.3 million shares have been designated Series A Preferred Stock. No shares are currently outstanding.

Common Stock

On May 4, 2006, the Company's Restated Certificate of Incorporation was amended to increase the number of authorized shares of common stock, par value $0.01 per share, from 300 million shares to 600 million shares.

Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) for 2012, 2011 and 2010 were as follows:



	Foreign Currency Translation Adjustment			Market Value Adjustment			Deferred Loss			Accumulated Other Comprehensive Income (Loss)

Balance, December 31, 2009	$	(13,408	)	$	(216	)	$	(7,337	)	$	(20,961	)
Currency translation	27,271			—			—			27,271
Market valuation, net of tax	—			3,090			—			3,090
Net deferred loss on cash flow hedges, net of tax	—			—			724			724
Other	—			502			—			502

Balance, December 31, 2010	13,863			3,376			(6,613		)	10,626
Currency translation	(12,920		)	—			—			(12,920		)
Market valuation, net of tax	—			(2,696		)	—			(2,696		)
Net deferred loss on cash flow hedges, net of tax	—			—			(1,042		)	(1,042		)
Other	—			(2,035		)	—			(2,035		)

Balance, December 31, 2011	943			(1,355		)	(7,655		)	(8,067		)
Currency translation	24,520			—			—			24,520
Market valuation, net of tax	—			(20		)	—			(20		)
Net deferred loss on cash flow hedges, net of tax	—			—			838			838
Other	—			(2,951		)	—			(2,951		)

Balance, December 31, 2012	$	25,463		$	(4,326	)	$	(6,817	)	$	14,320

The market valuation adjustments represent unrealized holding gains (losses) on available-for-sale securities, net of taxes. The net deferred loss on cash flow hedges represents deferred losses on the Company’s interest rate related derivative financial instruments designated as cash flow hedges, net of amounts reclassified to interest expense (see Note 13). For the years ended December 31, 2012, 2011 and 2010, the tax effects related to the market valuation adjustments and deferred losses were not material. Foreign currency translation adjustments are not adjusted for income taxes since they relate to indefinite investments in non-U.S. subsidiaries.

Dividends

During each of the first three quarters in 2012, the Company's Board of Directors declared a quarterly cash dividend of $0.17 per common share, and in November 2012, declared an increase in the quarterly cash dividend from $0.17 per common share to $0.30 per common share. This 76% increase raises the annual dividend rate to $1.20 per common share from $0.68 per common share and represents a three-fold increase from the annual rate in effect in 2011.

During each of the first three quarters of 2011, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share and in October 2011, declared an increase in the quarterly cash dividend from $0.10 per common share to $0.17 per common share.

Share Repurchase Plan

In January 2012, the Company’s Board of Directors authorized the Company to repurchase an additional $1 billion of the Company’s common stock, increasing the total available authorization at that time to $1.1 billion. The share repurchase authorization has no set expiration or termination date.

For the year ended December 31, 2012, the Company repurchased 3.4 million shares of its common stock at an average price of $58.31 per share for a total of $200 million. At December 31, 2012, $865 million remained available under the Company’s share repurchase authorizations.

For the year ended December 31, 2011, the Company repurchased 17.3 million shares of its common stock at an average price of $54.05 per share for a total of $935 million, including 15.4 million shares purchased in the first quarter from SB Holdings Capitial Inc., a wholly-owned subsidiary of GlaxoSmithKline plc., at an average price of $54.30 per share for a total of $835 million.

For the year ended December 31, 2010, the Company repurchased 14.7 million shares of its common stock at an average price of $51.04 per share for $750 million, including 4.5 million shares purchased in the first quarter at an average price per share of $56.21 for $251 million under an accelerated share repurchase transaction (“ASR”) with a bank.

Under the ASR, in January 2010, the Company repurchased 4.5 million shares of the Company's outstanding common stock for an initial purchase price of $56.05 per share. The purchase price of these shares was subject to an adjustment based on the volume weighted average price of the Company's common stock during a period following execution of the agreement. The total cost of the initial purchase was $250 million. The purchase price adjustment was settled in the first quarter of 2010 and resulted in an additional cash payment of $0.7 million, for a final purchase price of $251 million, or $56.21 per share.

For the years ended December 31, 2012, 2011 and 2010 the Company reissued 3.9 million shares, 3.6 million shares and 2.1 million shares, respectively, for employee benefit plans.