Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from Debt [USD, Millions]

Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

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e05dd2ed9e12787f61a8cd692aadcd22b6ad8480c4e9929ebc07cf853f2708fe

Net revenues (USD, millions)

Cost of services (USD, millions)

Selling, general and administrative (USD, millions)

Amortization of intangible assets (USD, millions)

Other operating expense, net (USD, millions)

Total operating costs and expenses, net (USD, millions)

Operating income (USD, millions)

Interest expense, net (USD, millions)

Other income (expense), net (USD, millions)

Total non-operating expense, net (USD, millions)

Income before income taxes and equity in earnings of equity method investees (USD, millions)

Income tax expense (USD, millions)

Equity in earnings of equity method investees, net of taxes (USD, millions)

Net income (USD, millions)

Less: Net income attributable to noncontrolling interests (USD, millions)

Net income attributable to Quest Diagnostics (USD, millions)

716c1036af53e032ffe43aedc363fad47b7c98c631f3797faa05183d920d5da2

The sharp increase in cash during Q4 2023 was driven primarily by **financing activities**, notably **proceeds from borrowings** totaling **$2,592 million**, which more than offset the lower operating cash flow and higher investment outflows such as increased spending on business acquisitions.  **[0001022079-24-000041_dgx-20231231.htm:109]** **[0001022079-24-000041_dgx-20231231.htm:117]** 

What drove the sharp increase in cash in Q4 2023?

Cash is exceptionally high in Q3 2024 because **strong operating cash inflows** and **significant financing activities**, particularly proceeds from borrowings, more than offset the large cash outflows from investing activities. Specifically, operating activities increased cash by **$125 million** compared to the previous period, and financing activities provided an inflow of **$1.254 billion**—driven by **$1.846 billion** in borrowings—despite offsetting outflows from debt repayments and dividend payments. These combined factors resulted in a net increase of **$78 million**, raising the cash balance to **$764 million** in Q3 2024.  **[0001022079-24-000190_dgx-20240930.htm:35]** **[0001022079-24-000190_dgx-20240930.htm:2]** 

Why is cash exceptionally high in Q3 2024?

The significant jump in **total assets** in Q3 2024 was primarily driven by several key acquisitions. Notably, Quest Diagnostics acquired **LifeLabs Inc.** for approximately **USD $1 billion**, select assets of **Allina Health's outreach laboratory services business** for **$230 million**, and the laboratory business of three physician groups in New York for **$300 million**—along with other smaller acquisitions. These transactions significantly boosted the company's asset base, which was further enhanced by marked increases in **Goodwill and Intangible Assets, net**, as well as enhancements in **Property, Plant, and Equipment, net** and **Accounts Receivable, net**. This combination of strategic acquisitions and subsequent asset revaluation collectively contributed to the jump in total assets in Q3 2024.  **[0001022079-24-000190_dgx-20240930.htm:26]** **[0001022079-24-000190_dgx-20240930.htm:2]** 

What caused the significant jump in total assets in Q3 2024?

The surge in long-term debt in **Q3 2024** was primarily driven by a substantial debt issuance. Specifically, Quest Diagnostics issued **$1.85 billion** in senior notes with an average coupon of approximately **4.8%** in August 2024. This financing activity significantly increased the company's long-term debt, and it was part of broader financing efforts that provided net cash of **$1,254 million** over the nine months ended September 30, 2024.  **[DGX_3403177_5]** **[20241022NY35982:3]** 

Why did long-term debt surge in Q3 2024?

The spike in the current portion of long-term debt in Q1 2024 is explained by the fact that the **4.25% Senior Notes due April 2024** were reclassified from long-term debt to current debt as their maturity date approached, which increased the current portion substantially from **$303 million at the end of 2023** to **$906 million by the end of Q1 2024**.  **[0001022079-24-000096_dgx033120248-kex991.htm:3]** **[0001022079-24-000099_dgx-20240331.htm:2]** **[0001022079-24-000041_dgx-20231231.htm:144]** 

What explains the spike in the current portion of long-term debt in Q1 2024?

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The near doubling of **Operating Income** in **Q4 2023** was primarily driven by multiple factors, including **growth in the base business** (with base revenues increasing by **4.7%** and testing volumes growing by **5.2%**), significant **cost reductions** through lower support costs and decreased performance-based compensation, a major decline in **COVID-19 testing revenues** (approximately **80%** drop, offset by base business strength), and a substantial reduction in **SG&A expenses** (from **$563 million** in Q4 2022 to **$407 million** in Q4 2023) which also contributed to improved margins.  **[DGX_3371541_4]** **[0001022079-24-000009_dgx123120238-kexhibit991.htm:2]** **[0001022079-24-000009_dgx123120238-kexhibit991.htm:5]** 

What factors contributed to the near doubling of Operating Income in Q4 2023?

Quest Diagnostics’ net income almost doubled in Q4 2023 because **lower overall operating costs and expenses** significantly improved profitability. In that quarter, the company reduced its selling, general and administrative expenses (from **$563 million** in Q4 2022 to **$407 million** in Q4 2023) and better managed other operating costs, which helped boost operating income from **$135 million** to **$267 million**. Additionally, a **4.7% increase in base business revenues** (reaching **$2.25 billion**) helped offset the impact of an **80% drop in COVID-19 testing revenues**, propelling the net income attributable to Quest Diagnostics from **$101 million** in Q4 2022 to **$192 million** in Q4 2023.  **[DGX_3371541_4]** **[0001022079-24-000009_dgx123120238-kexhibit991.htm:5]** 

Why did Net Income attributable to Quest Diagnostics almost double in Q4 2023?

The sharp spike in **Other Operating Expense** in **Q4 2023** was primarily driven by two factors: a **$29 million impairment charge** on certain long-lived assets related to the shutdown of a business, and a **$11 million loss** associated with an increase in the fair value of the contingent consideration accrual from previous acquisitions.  **[0001022079-24-000041_dgx-20231231.htm:106]** **[0000930413-24-000979_c108438_pre14a-ixbrl.htm:104]** 

What drove the sharp spike in Other Operating Expense in Q4 2023?

The turnaround in **Q4 2023** was primarily attributed to **gains associated with investments in deferred compensation plans**. This change marked a significant shift from prior periods, where there were substantial losses related to changes in the carrying value of strategic investments and deferred compensation plan investments.  **[0001022079-24-000041_dgx-20231231.htm:106]** **[0001022079-24-000009_dgx123120238-kexhibit991.htm:5]** 

What caused the turnaround in Other Income (Expense) in Q4 2023?

8c9a5be9bb99f7f327db9e774c7985d27d0eeaf211b9b28901860876f7efdea3

- United States

- Foreign Operations

Total Revenue

ad32c4fc09479bf6dfb6ef71147629273db9853f4701166976ea3e4da6d9038f

Quest Diagnostics Inc (DGX)

Financials