Quarterly Operating Results (unaudited) (Tables)

12 Months Ended

Dec. 31, 2019

Quarterly Financial Data [Abstract]

Quarterly Operating Results

2019 (a)	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Total Year
	(b)		(c)		(d)		(e)
Net revenues	$	1,891	$	1,953	$	1,956	$	1,926	$	7,726
Gross profit	647		688		692		662		2,689
Income from continuing operations	176		219		226		265		886
Income from discontinued operations, net of taxes	—		20		—		—		20
Net income	176		239		226		265		906
Less: Net income attributable to noncontrolling interests	12		13		11		12		48
Net income attributable to Quest Diagnostics	$	164	$	226	$	215	$	253	$	858
Earnings per share attributable to Quest Diagnostics' common stockholders - basic:
Income from continuing operations	$	1.22	$	1.52	$	1.59	$	1.88	$	6.21
Income from discontinued operations	—		0.15		—		—		0.15
Net income	$	1.22	$	1.67	$	1.59	$	1.88	$	6.36
Earnings per share attributable to Quest Diagnostics' common stockholders - diluted:
Income from continuing operations	$	1.20	$	1.51	$	1.56	$	1.86	$	6.13
Income from discontinued operations	—		0.15		—		—		0.15
Net income	$	1.20	$	1.66	$	1.56	$	1.86	$	6.28

2018 (a)	First Quarter		Second Quarter		Third Quarter		Fourth Quarter		Total Year
	(f)		(g)		(h)		(i)
Net revenues	$	1,884	$	1,919	$	1,889	$	1,839	$	7,531
Gross profit	658		676		667		604		2,605
Income from continuing operations	189		233		227		139		788
Income from discontinued operations, net of taxes	—		—		—		—		—
Net income	189		233		227		139		788
Less: Net income attributable to noncontrolling interests	12		14		14		12		52
Net income attributable to Quest Diagnostics	$	177	$	219	$	213	$	127	$	736
Earnings per share attributable to Quest Diagnostics' common stockholders - basic:
Income from continuing operations	$	1.30	$	1.60	$	1.56	$	0.93	$	5.39
Income from discontinued operations	—		—		—		—		—
Net income	$	1.30	$	1.60	$	1.56	$	0.93	$	5.39
Earnings per share attributable to Quest Diagnostics' common stockholders - diluted:
Income from continuing operations	$	1.27	$	1.57	$	1.53	$	0.92	$	5.29
Income from discontinued operations	—		—		—		—		—
Net income	$	1.27	$	1.57	$	1.53	$	0.92	$	5.29

(a) During the third quarter of 2006, the Company completed the wind down of Nichols Institute Diagnostics ("NID"), a test kit manufacturing subsidiary. As a result, NID was classified as discontinued operations for all periods presented (see Note 21 to the audited consolidated financial statements). The process for estimating revenues and the ultimate collection of accounts receivable involves significant judgment and estimation. The Company follows a standard process, which considers historical denial and collection experience and other factors, to estimate contractual allowances and implicit price concessions, recording adjustments in the current period as changes in estimates. Based on this process, during the fourth quarter of 2018, the Company increased its reserves for revenues and accounts receivable by approximately $35 million (see Note 3 to the consolidated financial statements).

(b) Included pre-tax amortization expense of $29 million ($24 million in amortization of intangible assets and $5 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $22 million, primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company ($11 million in cost of services and $11 million in selling, general and administrative expenses); a net pre-tax gain of $8 million, primarily due to a gain associated with an insurance claim for hurricane related losses partially offset by non-cash asset impairment charges ($1 million charge in selling, general and administrative expenses offset by a $9 million gain in other operating (income) expense, net); and excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense.

(c) Included pre-tax amortization expense of $30 million ($25 million in amortization of intangible assets and $5 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $26 million, primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company ($11 million in cost of services and $15 million in selling, general and administrative expenses); a net pretax gain of $6 million in other operating (income) expense, net, primarily due to a gain associated with the decrease in the fair value of the contingent consideration accrual associated with a previous acquisition; and excess tax benefits associated with stock-based compensation arrangements of $5 million recorded in income tax expense. Income from discontinued operations, net of taxes includes discrete tax benefits of $20 million associated with the favorable resolution of certain tax contingencies related to NID.

(d) Included pre-tax amortization expense of $25 million ($23 million in amortization of intangible assets and $2 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $16 million, primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company ($7 million in cost of services and $9 million in selling, general and administrative expenses); a net pre-tax gain of $3 million, primarily due to a gain associated with the decrease in the fair value of the contingent consideration accrual associated with a previous acquisition partially offset by costs incurred related to the AMCA Data Security Incident (a $7 million gain in other operating (income) expense, net offset by a $4 million charge in selling, general and administrative expenses); and excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense.

(e) Includes a net pre-tax gain of $72 million, primarily associated with the sale and leaseback of a property (a $73 million gain in other operating (income) expense, net offset by a $1 million charge in selling, general and administrative expenses); pre-tax amortization expense of $27 million ($24 million in amortization of intangible assets and $3 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $14 million, primarily associated with system conversions and integration incurred in connection with further restructuring and integrating the Company ($6 million in cost of services and $8 million in selling, general and administrative expenses); and excess tax benefits associated with stock-based compensation arrangements of $2 million recorded in income tax expense.

(f) Included pre-tax charges of $31 million, primarily associated with workforce reduction, systems conversions and integration incurred in connection with further restructuring and integrating the Company ($12 million in cost of services, $18 million in selling, general and administrative expenses and $1 million in other operating (income) expense, net); pre-tax amortization expense of $26 million ($22 million in amortization of intangible assets and $4 million in equity in earnings of equity method investees, net of taxes); and excess tax benefits associated with stock-based compensation arrangements of $8 million recorded in income tax expense.

(g) Included pre-tax charges of $25 million, primarily associated with workforce reduction, systems conversions and integration incurred in connection with further restructuring and integrating the Company ($14 million in cost of services and $11 million in selling, general and administrative expenses); pre-tax amortization expense of $26 million ($22 million

in amortization of intangible assets and $4 million in equity in earnings of equity method investees, net of taxes); net pre-tax charges of $10 million, primarily associated with certain legal matters partially offset by a gain associated with an insurance claim for hurricane related losses ($11 million in cost of services offset by a $1 million gain in other operating (income) expense, net); excess tax benefits associated with stock-based compensation arrangements of $5 million recorded in income tax expense; and an income tax benefit of $15 million associated with a change in a tax return accounting method that enabled the Company to accelerate the deduction of certain expenses on its 2017 tax return at the federal corporate statutory tax rate in effect during 2017.

(h) Included pre-tax amortization expense of $27 million ($22 million in amortization of intangible assets and $5 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $19 million, primarily associated with workforce reduction, systems conversions and integration incurred in connection with further restructuring and integrating the Company ($10 million in cost of services and $9 million in selling, general and administrative expenses); a pre-tax benefit of $12 million, primarily associated with the decrease in the fair value of the contingent consideration accrual associated with a previous acquisition partially offset by non-cash asset impairment charges ($13 million gain in other operating (income) expense, net offset by $1 million charge in cost of services); and excess tax benefits associated with stock-based compensation arrangements of $4 million recorded in income tax expense.

(i) Included pre-tax charges of $47 million, primarily associated with workforce reductions, systems conversions and integration incurred in connection with further restructuring and integrating the Company ($20 million in cost of services and $27 million in selling, general and administrative expenses); pre-tax amortization expense of $28 million ($24 million in amortization of intangible assets and $4 million in equity in earnings of equity method investees, net of taxes); pre-tax charges of $4 million, primarily associated with the loss on the sale of a foreign subsidiary recorded in other operating (income) expense, net; $1 million of income tax expense associated with finalizing the impact of the enactment of TCJA; and excess tax benefits associated with stock-based compensation arrangements of $1 million recorded in income tax expense.