During the nine months ended September 30, 2024, the Company completed acquisitions for an aggregate purchase price of $1.8 billion (including contingent consideration initially estimated at $6 million), net of cash acquired, including the acquisitions discussed below. Of such amount, $30 million was prepaid during the twelve months ended December 31, 2023. In the Company's consolidated statement of cash flows for the nine months ended September 30, 2024, such $30 million is included in business acquisitions, net of cash acquired, with a corresponding offset in other investing activities.

The acquisitions preliminarily resulted in goodwill of $872 million, $590 million of which is deductible for tax purposes. See the table below for a preliminary summary of the assets acquired and liabilities assumed, which may be revised as additional information becomes available during the measurement period.

On August 23, 2024, the Company acquired all of the issued and outstanding common shares of LifeLabs Inc. and all of the partnership interests of BPC Lab Finance LP (collectively, "LifeLabs") in an all-cash transaction for approximately CAN $1.35 billion (approximately USD $1 billion), net of cash acquired. LifeLabs provides laboratory diagnostic information and digital health connectivity systems in Canada. The acquisition price is subject to a customary net working capital adjustment. The Company funded the acquisition with a portion of the net proceeds from the issuance of senior notes (see Note 7 for further details).

The purchase price allocation in the table below is based upon a preliminary valuation and the Company's estimates and assumptions are subject to change within the measurement period as the valuation is finalized. Management is currently in the process of verifying data and finalizing information related to the valuation and recording of identifiable intangible assets, certain other assets and liabilities, and the corresponding effect on the amount of goodwill.

The fair value of the customer related intangible assets in the table below were determined using a multi-period excess earnings method, a form of the income approach, utilizing discount rates ranging from 13.0% to 14.0%. The fair value of the trade name intangible asset in the table below was determined using a relief from royalty method, utilizing a 12.0% discount rate.

The following unaudited pro forma combined financial information reflects the consolidated statement of operations of the Company as if the acquisition of LifeLabs had occurred as of January 1, 2023. The pro forma information includes adjustments primarily related to the amortization of acquired intangible assets (see below), interest expense associated with debt of LifeLabs which was extinguished prior to the acquisition, interest expense associated with senior notes issued to fund the acquisition (see Note 7), the impact on depreciation expense of recording acquired property, plant and equipment at fair value (see below), and transaction costs related to the LifeLabs acquisition. The pro forma combined financial information does not include the estimated annual synergies expected to be realized upon completion of the integration of LifeLabs and therefore is not indicative of the results of operations as they would have been had the transaction been effected on the assumed date.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

Pro forma net revenues	$	2,588	$	2,461	$	7,700	$	7,471

Pro forma net income attributable to Quest Diagnostics	$	222	$	225	$	647	$	661

Pro forma earnings per share attributable to Quest Diagnostics' common stockholders:
Basic	$	1.97	$	1.99	$	5.78	$	5.87
Diluted	$	1.95	$	1.97	$	5.72	$	5.79

On September 16, 2024, the Company acquired select assets of the outreach laboratory services business of Allina, which serves providers and patients in Minnesota and Wisconsin, in an all-cash transaction for $230 million.

The acquisitions were accounted for under the acquisition method of accounting. As such, the assets acquired and liabilities assumed were recorded based on their estimated fair values as of the closing dates. The goodwill recorded primarily includes the expected synergies resulting from combining the operations of the acquired entity with those of the Company and the value associated with an assembled workforce and other intangible assets that do not qualify for separate recognition. All of the goodwill acquired in connection with the acquisitions has been allocated to the Company's DIS business (for further details regarding business segment information, see Note 12). The following table provides a preliminary summary of the assets acquired and liabilities assumed, which may be revised as additional information becomes available during the measurement period.


	LifeLabs		Laboratory Business of Three Physician Groups in New York		Select Assets of the Outreach Laboratory Services Business of Allina Health		Other Acquisitions (a)		Total

Cash and cash equivalents	$	50	$	—	$	—	$	—	$	50
Accounts receivable	30		—		—		—		30
Other current assets	23		—		—		2		25
Property, plant and equipment	255		—		—		4		259
Finance lease assets (recorded in property, plant and equipment)	—		—		—		17		17
Operating lease right-of-use assets	67		—		—		17		84
Goodwill	300		243		175		154		872

Intangible assets	434		57		55		95		641
Other assets	36		—		—		—		36

Total assets acquired	1,195		300		230		289		2,014

Accounts payable and accrued expenses	67		—		—		—		67

Current portion of long-term operating lease liabilities	17		—		—		4		21
Finance lease liabilities (recorded in long-term debt)	—		—		—		17		17
Long-term operating lease liabilities	50		—		—		13		63
Other liabilities	8		—		—		7		15

Total liabilities assumed	142		—		—		41		183

Net assets acquired	$	1,053	$	300	$	230	$	248	$	1,831


	LifeLabs		Laboratory Business of Three Physician Groups in New York		Select Assets of the Outreach Laboratory Services Business of Allina Health		Other Acquisitions (a)		Total		Weighted Average Useful Life (in years)
Customer related	$	335	$	57	$	55	$	95	$	542	15 - 25
Trade name	99		—		—		—		99		15
	$	434	$	57	$	55	$	95	$	641

Except for the acquisition of LifeLabs (see above), supplemental pro forma combined financial information, and financial information subsequent to the acquisition close dates, has not been presented as the impact of the other acquisitions is not material to the Company's consolidated financial statements. Additionally, for such other acquisitions, it is impracticable to provide this financial information due to a variety of factors, including access to historical information and the operations of the acquirees being significantly integrated into the Company's cost structure shortly after the closing of the acquisitions.

During June 2024, the Company entered into a definitive agreement to acquire select assets of the outreach laboratory services business of OhioHealth, which serves providers and patients in Ohio. The transaction closed during October 2024. See Note 14 for further discussion.

During August 2024, the Company entered into a definitive agreement to acquire the outreach laboratory services business of University Hospitals, which serves providers and patients in Ohio. The transaction, which is expected to close in the fourth quarter of 2024, remains subject to customary closing conditions.