What changed in this filing

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Item 9A. Controls and Procedures

2025-02-20 compared with 2024-02-22 · 538 added, 362 removed, 1703 unchanged (35% of the section changed)

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Name Title Type of Trading Arrangement Security Action Date of Action Duration of Trading Arrangement Aggregate Number of Securities Covered

Chairman, Chief Executive Officer and President

Rule 10b5-1 plan to sell Common Stock Adoption October 28, 2024

October 28, 2024 to October 28, 2025 *

Up to 56,057 *

Karthikeyan Kuppusamy

SVP, Clinical Solutions

Rule 10b5-1 plan to sell Common Stock Adoption November 16, 2023 November 16, 2023 to November 13, 2024*

Up to 1,760 *

Catherine Doherty

SVP, Regional Businesses

Rule 10b5-1 plan to sell Common Stock Adoption August 29, 2023 August 29, 2023 to August 9, 2024*

Up to 8,723 *

Rule 10b5-1 plan to sell Common Stock Adoption October 28, 2024

October 28, 2024 to July 25, 2025 *

* Includes shares of common stock to be released from (a) stock options and/or restricted stock units that are expected to vest and/or (b) performance share awards that may vest, subject to the satisfaction of the applicable performance metrics.

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1 - Election of Directors,” “Director Independence,” “Board Committees” and "Delinquent Section 16(a) Reports" is incorporated by reference herein.

We have an insider trading policy related to the purchase, sale and other transactions in our securities entered into by our directors, officers, employees and related other persons and by us.

The insider trading policy is designed to comply and promote compliance with the securities laws and related rules and regulations, the New York Stock Exchange listing standards and our own Code of Ethics.

Our insider trading policy is filed as Exhibit 19 to this Report.

Executive Compensation

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Financial Statement Schedules

3.1 Restated Certificate of Incorporation (filed as an Exhibit to the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2022 and incorporated herein by reference) (Commission File Number 001-12215)

3.2 Amended and Restated By-Laws of the Company, as amended November 14, 2022 (filed as an Exhibit to the Company's current report on Form 8-K (Date of Report:

November 14, 2022) and incorporated herein by reference) (Commission File Number 001-12215)

4.1 Form of 6.95% Senior Note due 2037 (filed as an Exhibit to the Company's current report on Form 8-K (Date of Report:

June 19, 2007) and incorporated herein by reference) (Commission File Number 001-12215)

4.2 Form of 5.750% Senior Note due 2040 (filed as an Exhibit to the Company's current report on Form 8-K (Date of Report:

November 17, 2009) and incorporated herein by reference) (Commission File Number 001-12215)

4.3 Form of 4.250% Senior Note due 2024 (filed as an Exhibit to the Company's current report on Form 8-K (Date of Report:

March 12, 2014) and incorporated herein by reference) (Commission File Number 001-12215)

4.4 Form of 3.500% Senior Note due 2025 (filed as an Exhibit to the Company's current report on Form 8-K (Date of Report:

March 5, 2015) and incorporated herein by reference) (Commission File Number 001-12215)

4.5 Form of 4.700% Senior Note due 2045 (filed as an Exhibit to the Company's current report on Form 8-K (Date of Report:

March 5, 2015) and incorporated herein by reference) (Commission File Number 001-12215)

4.6 Form of 3.450% Senior Note due 2026 (filed as an Exhibit to the Company’s current report on Form 8-K (Date of Report:

May 23, 2016) and incorporated herein by reference) (Commission File Number 001-12215)

4.7 Form of 4.200% Senior Note due 2029 (filed as an Exhibit to the Company’s current report on Form 8-K (Date of Report:

March 7, 2019) and incorporated herein by reference) (Commission File Number 001-12215)

4.8 Form of 2.950% Senior Note due 2030 (filed as an Exhibit to the Company’s current report on Form 8-K (Date of Report:

December 9, 2019) and incorporated herein by reference) (Commission File Number 001-12215)

4.9 Form of 2.800% Senior Note due 2031 (filed as an Exhibit to the Company’s current report on Form 8-K (Date of Report:

May 11, 2020) and incorporated herein by reference) (Commission File Number 001-12215)

4.10 Form of 6.400% Senior Note due 2033 (filed as an Exhibit to the Company’s current report on Form 8-K (Date of Report October 30, 2023) and incorporated herein by reference) (Commission File Number 001-12215)

3.1 Restated Certificate of Incorporation of the Company, as amended August 14, 2024 (filed as an Exhibit to the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2024 and incorporated herein by reference) (Commission File Number 001-12215)

3.2 Amended and Restated By-Laws of the Company, as amended August 14, 2024 (filed as an Exhibit to the Company's current report on Form 8-K (Date of Report:

August 14, 2024) and incorporated herein by reference) (Commission File Number 001-12215)

4.1 Indenture dated as of June 27, 2001, among the Company, the Subsidiary Guarantors, and The Bank of New York (filed as an Exhibit to the Company's current report on Form 8-K (Date of Report:

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October 30, 2023) and incorporated herein by reference) (Commission File Number 001-12215)

4.34 Description of Securities (filed as an Exhibit to the Company's 2022 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

4.24 Twenty-Third Supplemental Indenture dated as of August 19, 2024, between the Company and The Bank of New York Mellon (filed as an Exhibit to the Company’s current report on Form 8-K (Date of Report:

August 14, 2024) and incorporated herein by reference) (Commission File Number 001-12215)

4.25* Description of Securities

10.1‡ Amended and Restated Employee Stock Purchase Plan, as amended, effective as of May 16, 2023 (filed as an Exhibit to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2023 and incorporated herein by reference) (Commission File Number 001-12215)

10.2‡ Amended and Restated Quest Diagnostics Incorporated Employee Long-Term Incentive Plan as amended March 31, 2023 (filed as an Exhibit to the Company’s quarterly report on Form 10-Q for the quarter ended June 30, 2023 and incorporated herein by reference) (Commission File Number 001-12215)

10.3‡ Quest Diagnostics Incorporated Form of 2021 Equity Award Agreement (filed as an Exhibit to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2021 and incorporated herein by reference) (Commission File Number 001-12215)

10.4‡ Quest Diagnostics Supplemental Deferred Compensation Plan (Post 2004) amended and restated as of December 1, 2020 (filed as an Exhibit to the Company’s quarterly report on Form 10-Q for the quarter ending September 30, 2021 and incorporated herein by reference) (Commission File Number 001-12215)

10.3‡ Form of Quest Diagnostics Incorporated Equity Award Agreement (filed as an Exhibit to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2024 and incorporated herein by reference) (Commission File Number 001-12215)

10.4‡ Quest Diagnostics Supplemental Deferred Compensation Plan (Post 2004) as amended and restated December 1, 2020 (filed as an Exhibit to the Company’s quarterly report on Form 10-Q for the quarter ending September 30, 2021 and incorporated herein by reference) (Commission File Number 001-12215)

10.5‡ Amendment No.

1 to Quest Diagnostics Supplemental Deferred Compensation Plan (Post 2004) (as amended and restated December 1, 2020), dated as of November 29, 2022 (filed as an Exhibit to the Company’s 2022 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

10.6‡ Quest Diagnostics Supplemental Deferred Compensation Plan (Pre-2005) amended and restated December 1, 2020 (filed as an Exhibit to the Company’s 2020 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

1 to Quest Diagnostics Supplemental Deferred Compensation Plan (Post 2004) (as amended and restated December 1, 2020), effective as of November 29, 2022 (filed as an Exhibit to the Company’s 2022 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

10.6* Amendment No.

2 to Quest Diagnostics Supplemental Deferred Compensation Plan (Post - 2004) (as amended and restated December 1, 2020), effective as of December 9, 2024

10.7‡ Quest Diagnostics Supplemental Deferred Compensation Plan (Pre-2005) amended and restated December 1, 2020 (filed as an Exhibit to the Co mpany’s 2020 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

10.8‡ Quest Diagnostics Incorporated Senior Management Incentive Plan, as amended and restated February 18, 2019 (filed as an Exhibit to the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2019 and incorporated herein by reference) (Commission File Number 001-12215)

10.8‡ Amended and Restated Quest Diagnostics Incorporated Executive Officer Severance Plan, as amended November 16, 2022 (filed as an Exhibit to the Company's current report on Form 8-K (Date of Report:

November 14, 2022) and incorporated herein by reference) (Commission File Number 001-12215)

10.9‡* The Quest Diagnostics Profit Sharing Plan (Amendment and Restatement, effective as of September 1 4 , 202 3 )

10.9‡* Amended and Restated Quest Diagnostics Incorporated Executive Officer Severance Plan, as amended November 12, 2024

10.10‡ The Quest Diagnostics Profit Sharing Plan (Amendment and Restatement, effective as of September 14, 2023) (filed as an Exhibit to the Company’s 2023 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

10.11* Amendment No.

1 to The Quest Diagnostics Profit Sharing Plan, dated as of December 9, 2024

10.12‡ Quest Diagnostics Incorporated Amended and Restated Deferred Compensation Plan for Directors as amended effective February 18, 2020 (filed as an Exhibit to the Company’s 2019 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

10.13‡ Amended and Restated Quest Diagnostics Incorporated Long-Term Incentive Plan for Non-Employee Directors (as amended November 18, 2020) (filed as an Exhibit to the Company’s 2020 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

10.12‡ Quest Diagnostics Incorporated Form of Non-Employee Director Equity Award Certificate (filed as an Exhibit to the Company’s 2015 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

10.14‡ Form of Quest Diagnostics Incorporated Non-Employee Director Equity Award Grant Certificate (filed as an Exhibit to the Company’s 2015 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

10.15‡ Aircraft Time Sharing Agreement dated as of February 16, 2023 between Quest Diagnostics Clinical Laboratories, Inc.

Davis (filed as an Exhibit to the Company's 2022 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

10.16† Equity Purchase Agreement, dated as of July 2, 2024, by and among the Company and 1000923563 Ontario Inc., a subsidiary of the Company, and Borealis Infrastructure Corporation, a corporation incorporated under the federal laws of Canada, BPC Health Trust, a trust organized under the laws of the Province of Ontario, LifeLabs Inc, a corporation incorporated under the federal laws of Canada, and BPC Lab Finance LP, an Ontario limited partnership (filed as an Exhibit to the Company's quarterly report on Form 10-Q for the quarter ending June 30, 2024 and incorporated herein by reference)(Commission File Number 001-12215)

19.1* Quest Diagnostics Incorporated Policy on Securities Trading

21.1* Subsidiaries of Quest Diagnostics Incorporated

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32.2** Section 1350 Certification of Chief Financial Officer

97.1* Quest Diagnostics Incorporated Dodd-Frank Clawback Policy, adopted November 13, 2023

97.1 Quest Diagnostics Incorporated Dodd-Frank Clawback Policy, adopted November 13, 2023 (filed as an Exhibit to the Company’s 2023 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

99.1 Fourth Amended and Restated Receivables Sale Agreement, dated as of October 28, 2015, between Quest Diagnostics Incorporated and the subsidiaries party thereto from time to time, as Sellers, and Quest Diagnostics Receivables Inc., as Buyer (filed as an Exhibit to the Company’s current report on Form 8-K (Date of Report:

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99.2 Amendment No.

1 to Fourth Amended and Restated Receivables Sale Agreement, dated October 25, 2019 (filed as an Exhibit to the Company’s current report on Form 8-K (Date of Report:

1 to Fourth Amended and Restated Receivables Sale Agreement, dated as of October 25, 2019 (filed as an Exhibit to the Company’s current report on Form 8-K (Date of Report:

May 4, 2020) and incorporated herein by reference) (Commission File Number 001-12215)

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8 to Sixth Amended and Restated Credit and Security Agreement, dated as of October 19, 2023 (filed as an Exhibit to the Company’s quarterly report on Form 10-Q for the quarter ended September 30, 2023 and incorporated herein by reference) (Commission File Number 001-12215)

99.13 Amendment and Restatement Agreement, dated as of November 23, 2021, relating to the Second Amended and Restated Credit Agreement, dated as of March 22, 2018, among Quest Diagnostics Incorporated, as Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and other agents party thereto and which includes, as Exhibit A, the Third Restated Credit Agreement (filed as an Exhibit to the Company's 2021 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

99.13* Amendment No.

1, dated as of March 31, 2023, relating to the Third Amended and Restated Credit Agreement, dated as of November 23, 2021, among Quest Diagnostics Incorporated, as Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and other agents party thereto and which includes, as Exhibit A, the Third Amended and Restated Credit Agreement (filed as an Exhibit to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2023 and incorporated herein by reference) (Commission File Number 001-12215)

99.15 Group Joinder Agreement, among Reprosource Fertility Diagnostics, Inc., Blueprint Genetics, Inc., and Mid America Clinical Laboratories, LLC, dated as of August 13, 2021, related to the Fourth Amended and Restated Receivables Sales Agreement, dated October 28, 2015, among Quest Diagnostics Incorporated and certain of its subsidiaries ( f iled as an Exhibit to the Company’s 2022 annual report on Form 10-K and incorporated herein by reference)(Commission File Number 001-12215)

9 to Sixth Amended and Restated Credit and Security Agreement, dated as of August 8, 2024

99.14* Amendment No.

10 to Sixth Amended and Restated Credit and Security Agreement, dated as of November 20, 2024

99.15 Third Amended and Restated Credit Agreement, dated as of November 23, 2021, among Quest Diagnostics Incorporated, as Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and other agents party thereto (filed as an Exhibit to the Company's 2021 annual report on Form 10-K and incorporated herein by reference) (Commission File Number 001-12215)

99.16 Amendment No.

1, dated as of March 31, 2023, relating to the Third Amended and Restated Credit Agreement, dated as of November 23, 2021, among Quest Diagnostics Incorporated, as Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and other agents party thereto (filed as an Exhibit to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2023 and incorporated herein by reference) (Commission File Number 001-12215)

99.17 Group Joinder Agreement, among Reprosource Fertility Diagnostics, Inc., Blueprint Genetics, Inc., and Mid America Clinical Laboratories, LLC, dated as of August 13, 2021, related to the Fourth Amended and Restated Receivables Sale Agreement, dated as of October 28, 2015, among Quest Diagnostics Incorporated and certain of its subsidiaries (filed as an Exhibit to the Company’s 2022 annual report on Form 10-K and incorporated herein by reference)(Commission File Number 001-12215)

101.INS Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

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‡ Management contract or compensatory plan or arrangement required to be filed as an Exhibit to this Form 10-K pursuant to Item 15(b) of Form 10-K.

† Certain information contained in this exhibit, marked by [***], has been omitted because it (i) is not material and (ii) is the type of information that we treat as private or confidential.

(b) Exhibits filed as part of this Report.

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Our other customers include health plans, employers, emerging retail healthcare providers, government agencies, pharmaceutical companies and other commercial clinical laboratories.

We offer broad access to clinical testing through a nationwide network of laboratories, patient service centers, phlebotomists in physician offices, and our connectivity resources, including call centers and mobile phlebotomists, nurses and other health and wellness professionals.

We offer broad access to clinical testing through a network of laboratories, patient service centers, phlebotomists in physician offices, and our connectivity resources, including call centers and mobile phlebotomists, nurses and other health and wellness professionals.

Our large in-house staff of medical and scientific experts, including medical directors, scientific directors, genetic counselors and board-certified geneticists, provide medical and scientific consultation to healthcare providers and patients regarding our tests and test results, and help them best utilize our services to improve outcomes and enhance satisfaction.

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Clinical testing is an essential element in the delivery of healthcare services.

Clinical testing is used for predisposition, screening, monitoring, diagnosis, prognosis and treatment choices of diseases and other medical conditions.We primarily compete with three types of clinical testing providers:

Clinical testing is used for predisposition, screening, monitoring, diagnosis, prognosis and treatment choices of diseases and other medical conditions.

We primarily compete with three types of clinical testing providers:

commercial clinical laboratories, hospital-affiliated laboratories and physician-office laboratories.

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Testing volume is also subject to declines due to severe weather or other events (such as public health emergencies and health pandemics), which can deter patients from having testing performed and which can vary in duration and severity from year to year.

Additionally, orders for clinical testing generated from customers, including physicians, hospitals, and consumers, can be affected by factors such as changes in the United States economy and regulatory environment, which affect the number of unemployed and uninsured, and design changes in healthcare plans, which affect utilization as well as patient responsibility for healthcare costs.

Additionally, orders for clinical testing generated from customers, including physicians, hospitals, and consumers, can be affected by factors such as changes in the economy and regulatory environment, which affect the number of unemployed and uninsured, and design changes in healthcare plans, which affect utilization as well as patient responsibility for healthcare costs.

We assess our revenue performance for our DIS business based upon, among other factors, volume (measured by test requisitions) and revenue per requisition.

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Net revenues $9,872 $9,252 $9,883

Base business revenues (a) $9,029 $8,429 $8,018

COVID-19 testing revenues $223 $1,454 $2,770

DIS revenues $9,614 $8,976 $9,609

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Capital expenditures $425 $408 $404

(a) Excludes COVID-19 testing.

The impact that the COVID-19 pandemic had on our DIS revenues, including requisition volume and revenue per requisition, are discussed further below under "Results of Operations".

For further discussion of the year-over-year changes for the year ended December 31, 2024 compared to the year ended December 31, 2023, see "Results of Operations" below.

Acquisition of select assets of the laboratory services business of New York-Presbyterian

On April 17, 2023, we completed the 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.

Acquisition of select assets of Lenco Diagnostic Laboratories, Inc.

On February 12, 2024, we acquired select assets of Lenco, an independent clinical diagnostic laboratory provider serving physicians in New York, in an all-cash transaction for $111 million.

The acquired business is included in our DIS business.

For further details, see Note 6 to the audited consolidated financial statements.

Acquisition of Haystack Oncology, Inc.

On June 20, 2023, we acquired Haystack Oncology, Inc., an early-stage oncology company focused on minimal residual disease testing to aid in the detection of residual or recurring cancer and better inform therapy decisions.

The acquisition was an all-cash transaction for $392 million, net of $1 million of cash acquired, which consisted of cash consideration of $304 million and contingent consideration initially estimated at $88 million.

Under the contingent consideration obligation, the seller can receive up to $100 million of additional consideration dependent upon the achievement of certain revenue benchmarks through 2028 and up to an additional $50 million of consideration dependent upon us receiving reimbursement coverage from the Centers for Medicare and Medicaid Services.

Acquisition of select assets of PathAI Diagnostics

On June 10, 2024, we acquired select assets of PathAI Diagnostics, a business that provides anatomic and digital pathology laboratory services, in an all-cash transaction for $100 million.

The acquired business is included in our DIS business.

For further details, see Notes 6 and 8 to the audited consolidated financial statements.

Acquisition of all of the issued and outstanding common shares of LifeLabs Inc.

and all of the partnership interests of BPC Lab Finance LP (collectively, "LifeLabs")

On August 23, 2024, we acquired LifeLabs in an all-cash transaction for approximately CAN $1.35 billion (approximately USD $1 billion).

LifeLabs provides laboratory diagnostic information and digital health connectivity systems in Canada.

The acquired business is included in our DIS business.

Acquisition of select assets of the outreach laboratory services business of Allina Health ("Allina")

On September 16, 2024, we 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 acquired business is included in our DIS business.

Acquisition of the laboratory business of three physician groups in New York

On September 30, 2024, we acquired the laboratory business of three physician groups in New York in an all-cash transaction for $300 million.

The acquired business is included in our DIS business.

Acquisition of select assets of the outreach laboratory services business of OhioHealth

On October 13, 2024, we acquired select assets of the outreach laboratory services business of OhioHealth, which serves providers and patients in Ohio, in an all-cash transaction for $200 million.

The acquired business is included in our DIS business.

Acquisition of the outreach laboratory services business of University Hospitals

On December 30, 2024, we acquired the outreach laboratory services business of University Hospitals, which serves providers and patients in Ohio, in an all-cash transaction for $183 million.

The acquired business is included in our DIS business.

For further details, see Notes 6 to the audited consolidated financial statements.

Senior Notes Offering

During November 2023, we completed a senior notes offering, consisting of $750 million aggregate principal amount of 6.40% senior notes due November 2033 (the "2033 Senior Notes").

We expect to use the net proceeds from the offering for general corporate purposes, which may include the redemption or repayment of indebtedness, including our $300 million aggregate principal amount of 4.25% senior notes due April 2024.

For further details regarding our debt, see Note 14 to the audited consolidated financial statements.

In August 2024, we completed a $1.85 billion senior notes offering, consisting of $400 million aggregate principal amount of 4.60% senior notes due December 2027 (the "2027 Senior Notes"), $600 million aggregate principal amount of 4.625% senior notes due December 2029 (the "2029 Senior Notes") and $850 million aggregate principal amount of 5.00% senior notes due December 2034 (the "2034 Senior Notes," and together with the 2027 Senior Notes and the 2029 Senior Notes, the "Senior Notes").

We used a portion of the net proceeds from the Senior Notes offering to fund the purchase price and related transaction costs of the acquisition of LifeLabs (see above for further details).

We expect to use the balance of the net proceeds from the offering for general corporate purposes, which may include the redemption or repayment of indebtedness, including our 3.50% senior notes due March 2025.

For further details regarding our debt, see Note 13 and Note 15 to the audited consolidated financial statements.

Invigorate Program

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Other areas of focus include reducing denials and patient concessions, enhancing the digital experience, and selecting and retaining talent.

For the year ended December 31, 2023, we incurred $43 million of pre-tax charges in connection with our Invigorate program and other restructuring activities, including $25 million of employee separation costs, with the remainder primarily consisting of integration costs.

For the year ended December 31, 2024, we incurred $62 million of pre-tax charges in connection with restructuring and integration activities, including $28 million of employee separation costs, with the remainder including integration costs.

Most of the charges will result in cash expenditures.

Additional restructuring charges may be incurred in future periods, including as we identify additional opportunities to achieve further savings and productivity improvements.

Additional restructuring and integration charges may be incurred in future periods, including as we identify additional opportunities to achieve further savings and productivity improvements.

For further details of the Invigorate program and associated costs, see Note 5 to the audited consolidated financial statements.

Outlook and Trends

The healthcare system in the United States continues to evolve and industry change is likely to be extensive.

The healthcare system in the United States continues to evolve and industry and regulatory change is likely to be extensive.

Because diagnostic information services is an essential healthcare service, we believe that the industry will continue to grow over the long term.

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There could be a shift to capitation arrangements where we agree to a predetermined monthly reimbursement rate for each member enrolled in a restricted plan, generally regardless of the number or cost of services provided by us.

In both 2023 and 2022, we derived approximately 3% of our consolidated net revenues from capitated payment arrangements.

In 2023 and 2022, we derived approximately 9% and 8%, respectively, of our testing volume from capitated payment arrangements.

In 2024 and 2023, we derived

a pproximately 5% and 3%, respectively, of our consolidated net revenues from capitated payment arrangements and in 2024 and 2023, we derived approximately 11% and 9%, respectively, of our testing volume from capitated payment arrangements.

The increases from 2023 to 2024 were principally due to LifeLabs, which has revenues generated from various capitated arrangements with the government.

Following the Presidential election and changes in leadership at healthcare related regulatory bodies, we expect there to be changes with respect to the regulatory environment applicable to our business and these changes may be significant.

It is unclear, at this time, the extent of these changes and the impact such changes will have on our business.

Historically, the Medicare Clinical Laboratory Fee Schedule ("CLFS") and the Medicare Physician Fee Schedule established under Part B of the Medicare program have been subject to change, including each year.

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Consolidation is increasing pricing transparency, and may encourage internalization of clinical testing.

Recent and potentially on-going inflationary pressures have resulted in increases in the cost of our operations, including the costs of testing equipment, supplies and other goods and services we purchase from manufacturers, suppliers and others.

On-going inflationary pressures have resulted in increases in the cost of our operations, including the costs of testing equipment, supplies and other goods and services we purchase from manufacturers, suppliers and others.

Inflationary pressures, along with the competition for labor, have also resulted in a rise of our labor costs, which include the costs of compensation, benefits and recruiting and training new hires.

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Substantially all of the accounts receivable due from healthcare insurers represent amounts billed under fee-for-service arrangements.

Collection of our net revenues from healthcare insurers is normally a function of providing complete and correct billing information to the healthcare insurers within the various filing deadlines and generally occurs within 30 to 60 days of billing.

Collection of our net revenues from healthcare insurers is normally a function of providing complete and correct

billing information to the healthcare insurers within the various filing deadlines and generally occurs within 30 to 60 days of billing.

Provided we have billed healthcare insurers accurately with complete information prior to the established filing deadline, there has historically been little to no credit risk.

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Under capitated payment arrangements, the healthcare insurers typically reimburse us in the same month services are performed, essentially giving rise to no outstanding accounts receivable at the end of a reporting period.

If any capitated

payments are not received on a timely basis, we determine the cause and make a separate determination as to whether or not the collection of the amount from the healthcare insurer is at risk and, if so, would reserve accordingly.

If any capitated payments are not received on a timely basis, we determine the cause and make a separate determination as to whether or not the collection of the amount from the healthcare insurer is at risk and, if so, would reserve accordingly.

Government payers

Reimbursements from government payers are based on fee-for-service schedules set by governmental authorities, including traditional Medicare and Medicaid.

Net revenues recognized consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration we expect to receive from such payers, which considers historical denial and collection experience.

Reimbursements from domestic government payers are based on fee-for-service schedules set by governmental authorities, including traditional Medicare and Medicaid.

Reimbursements from government payers in Canada are based on a combination of fee-for-service schedules, with a cap on maximum billings, and capitated arrangements.

Net revenues recognized for fee-for-service arrangements principally consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration we expect to receive from such payers, which considers historical denial and collection experience.

Collection of our net revenues from government payers is normally a function of providing the complete and correct billing information within the various filing deadlines.

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These suits could involve claims for substantial damages.

Any professional liability litigation could also have an adverse impact on our client base and reputation.

Any professional liability litigation could also

have an adverse impact on our client base and reputation.

We maintain various liability insurance coverages for claims that could result from providing, or failing to provide, clinical testing services, including inaccurate testing results, and other exposures.

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and (g) a sustained decrease in share price.

If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we are required to perform the quantitative goodwill impairment test.

If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting

unit is less than its carrying value, then we are required to perform the quantitative goodwill impairment test.

Otherwise, no further analysis is required.

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The discounted cash flows analysis includes several unobservable inputs related to our own assumptions.

The assumptions and estimates used in the discounted cash flows model are based upon the best available information in the circumstances and include a forecast of expected future

cash flows, long-term growth rates, discount rates that are commensurate with economic risks, assumed income tax rates and estimates of capital expenditures and working capital.

The assumptions and estimates used in the discounted cash flows model are based upon the best available information in the circumstances and include a forecast of expected future cash flows, long-term growth rates, discount rates that are commensurate with economic risks, assumed income tax rates and estimates of capital expenditures and working capital.

The fair values of the reporting units could be different if, for example, forecasted revenue growth rates, economic conditions, government regulations or actions by payers to control utilization of or reimbursement for healthcare services, turn out to be different than our assumptions or estimates.

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We perform our annual impairment test during the fourth quarter of the fiscal year.

For the year ended December 31, 2023, in accordance with our policy to perform the quantitative test on a periodic basis, we updated the fair value calculation of our reporting units, performed the quantitative impairment test and concluded that goodwill was not impaired.

As a sensitivity, if the estimated fair value of each of our reporting units decreased by 10%, we still would have concluded that the goodwill for the reporting unit was not impaired.

For the year ended December 31, 2024, we performed a qualitative assessment for our DIS and risk assessment services reporting units.

Based on the totality of the information available for each reporting unit, we concluded that it was more likely than not that the estimated fair values were greater than the carrying values of the reporting values, and as such, no further analysis was required.

As a sensitivity, in conjunction with the most recent quantitative test performed for the year ended December 31, 2023, if the estimated fair values of each of our reporting units decreased by 10%, we would have concluded that our goodwill was not impaired.

Results of Operations

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$ (201) $ (152) $ (49) 32.3 %

Other income (expense), net 20 (55) 75 NM

Total non-operating (expense) income, net $ (132) $ (193) $ 61 NM

Other income, net 30 20 10 NM

Total non-operating expense, net $ (171) $ (132) $ (39) NM

Income tax expense $ (273) $ (248) $ (25) 10.1 %

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Amortization of intangible assets 1.3 1.2

Other operating expense (income), net 0.5 0.1

Other operating expense, net — 0.5

Total operating costs and expenses, net

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• pre-tax amortization expense of $127 million recorded in amortization of intangible assets or $0.84 per diluted share;

• pre-tax charges of $44 million ($5 million in selling, general and administrative expenses and $39 million in other operating expense (income), net), or $0.31 per diluted share, primarily representing a $29 million impairment charge on certain long-lived assets related to the shutdown of a business and, to a lesser extent, an $11 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions;

• pre-tax charges of $43 million ($16 million recorded in cost of services and $27 million recorded in selling, general and administrative expenses), or $0.29 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;

• pre-tax charges of $3 million in equity in earnings of equity method investees, net of tax, or $0.02 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments ;

• pre-tax net charges of $62 million ($27 million recorded in cost of services and $37 million recorded in selling, general and administrative expenses, partially offset by a $2 million gain recorded in other operating expense, net), or $0.42 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;

• pre-tax charges of $15 million recorded in equity in earnings of equity method investees, net of taxes, or $0.10 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments ;

• pre-tax charges of $6 million ($2 million recorded in cost of services, $2 million recorded in selling, general and administrative expenses and $2 million recorded in other operating expense, net, including a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions), or $0.04 per diluted share;

partially offset by

• excess tax benefits associated with stock-based compensation arrangements of $11 million, or $0.10 per diluted share, recorded in income tax expense.

For the year ended December 31, 2023, the year-over-year change in diluted weighted average common shares outstanding was principally driven by share repurchases, which positively benefited the year-over-year comparison of diluted earnings per share.

• pre-tax gains of $12 million, recorded in other income (expense), net, or $0.08 per diluted share, principally representing a non-recurring gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition, and

• $9 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.08 per diluted share.

Results for the year ended December 31, 2023 were affected by certain items that on a net basis decreased diluted earnings per share by $1.22 as follows:

• pre-tax amortization expense of $108 million recorded in amortization of intangible assets or $0.70 per diluted share;

• pre-tax charges of $93 million recorded in selling, general and administrative expenses, or $0.59 per diluted share, representing costs associated with donations, contributions and other financial support through Quest for Health Equity (our initiative with the Quest Diagnostics Foundation to reduce health disparities in underserved communities);

• pre-tax charges of $88 million ($32 million recorded in cost of services and $56 million recorded in selling, general and administrative expenses), or $0.56 per diluted share, primarily associated with workforce reductions, systems conversions and integration incurred in connection with further restructuring and integrating our business;

• pre-tax charges of $42 million ($30 million recorded in other income (expense), net, and $12 million recorded in equity in earnings of equity method investees, net of tax), or $0.26 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments ;

• net pre-tax charges of $13 million ($2 million recorded in cost of services and $11 million recorded in other operating expense (income), net), or $0.09 per diluted share, primarily representing a $14 million impairment charge on certain property, plant and equipment and a $5 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions, partially offset by a $10 million gain from a payroll tax credit under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") associated with the retention of employees;

• pre-tax charges of $44 million ($5 million recorded in selling, general and administrative expenses and $39 million recorded in other operating expense, net, representing a $29 million impairment charge on certain long-lived assets related to the shutdown of a business and, to a lesser extent, a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions), or $0.31 per diluted share;

• pre-tax charges of $3 million recorded in equity in earnings of equity method investees, net of taxes, or $0.02 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments ;

partially offset by

• an income tax benefit of $18 million, recorded in income tax expense, or $0.14 per diluted share, due to a cumulative adjustment to state deferred tax liabilities related to depreciation expense;

• excess tax benefits associated with stock-based compensation arrangements of $14 million, or $0.12 per diluted share, recorded in income tax expense.

Net revenues for the year ended December 31, 2023 decreased by 6.4% compared to the prior year.

DIS revenues for the year ended December 31, 2023 decreased by 6.6% compared to the prior year.

• $11 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.10 per diluted share.

Net revenues for the year ended December 31, 2024 increased by 6.7% compared to the prior year.

DIS revenues for the year ended December 31, 2024 increased by 7.1% compared to the prior year.

For the year ended December 31, 2024:

• The decrease in revenue compared to the prior year was driven by a decrease in COVID-19 testing, partially offset by growth in the base business and, to a lesser extent, the impact of recent acquisitions.

• The increase in DIS revenues compared to the prior year was driven primarily by organic growth in the base business (which excludes COVID-19 testing) and, to a lesser extent, the impact of recent acquisitions, partially offset by a decrease in COVID-19 testing.

For the year ended December 31, 2024, recent acquisitions contributed approximately 3.9% to DIS revenues.

• DIS volume decreased by 0.6% compared to the prior year driven by a decrease in COVID-19 testing, substantially offset by growth in the base business and the impact of recent acquisitions, which contributed approximately 0.4% to DIS volume.

• Revenue per requisition decreased by 5.9% compared to the prior year driven by the decrease in COVID-19 molecular testing.

• DIS volume increased by 5.5% compared to the prior year primarily driven by the impact of recent acquisitions, which contributed approximately 4.8% to DIS volume, and, to a lesser extent, organic growth in the base business, partially offset by a decrease in COVID-19 testing.

• Revenue per requisition increased by 1.3% compared to the prior year principally due to an increase in the number of tests per requisition and favorable test mix, partially offset by the impact of the decrease in COVID-19 testing and the impact of the acquisition of LifeLabs (which has a lower revenue per requisition).

• DIS revenues in the base business (including the impact of recent acquisitions) increased by 9.0% compared to the prior year.

• Testing volume in the base business (including the impact of recent acquisitions) was up 6.2% compared to the prior year.

• Revenue per requisition in the base business increased by 1.1% compared to the prior year principally due to an increase in the number of tests per requisition, business mix, and an increase in unit price, partially offset by growth in our Professional Laboratory Services engagements (which carry a lower revenue per requisition than the remainder of DIS).

DS revenues for the year ended December 31, 2023 increased by 0.7% compared to the prior year primarily due to higher revenues associated with our risk assessment services offered to the life insurance industry.

• Revenue per requisition in the base business increased by 2.4% compared to the prior year principally due to an increase in the number of tests per requisition and favorable test mix, partially offset by the impact of the acquisition of LifeLabs (which has a lower revenue per requisition).

DS revenues for the year ended December 31, 2024 decreased by 6.3% compared to the prior year primarily due to lower revenues associated with both our risk assessment services offered to insurers and our healthcare information technology businesses.

Cost of Services

Cost of services consists principally of costs for obtaining, transporting and testing specimens as well as facility costs used for the delivery of our services.

Cost of services decreased by $251 million for the year ended December 31, 2023 compared to the prior year.

The decrease was primarily driven by lower collection and supplies expenses associated with reduced COVID-19 testing volumes and, to a lesser extent, lower performance-based compensation, partially offset by wage and benefits increases.

Cost of services increased by $429 million for the year ended December 31, 2024 compared to the prior year.

T he increase wa s primari ly driven by the impact of recent acquisitions, wage increases, higher supplies expense, and lower performance-based compensation in the prior year period, partially offset by cost savings and productivity improvements from our Invigorate program.

Selling, General and Administrative Expenses ("SG&A")

SG&A consists principally of the costs associated with our sales and marketing efforts, billing operations, credit loss expense and general management and administrative support, as well as administrative facility costs.

SG&A decreased by $232 million for the year ended December 31, 2023, compared to the prior year, primarily driven by lower contributions and other financial support through Quest for Health Equity, lower compensation costs (including a reduction in headcount and performance-based compensation, partially offset by wage increases) and lower marketing expenses, partially offset by $45 million of higher costs associated with changes in the value of our deferred compensation obligations.

SG&A increased by $128 million for the year ended December 31, 2024, compared to the prior year.

The increase was primarily driven by the impact of recent acquisitions, lower performance-based compensation in the prior year period, and higher depreciation expense.

The changes in the value of our deferred compensation obligations is largely offset by changes in the value of the associated investments, which are recorded in other income (expense), net.

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Amortization of Intangible Assets

For the year ended December 31, 2023, amortization expense was $12 million lower than the prior year primarily due to the prior year including an adjustment to the useful life of a customer-related intangible asset.

For the year ended December 31, 2024, amortization expense was $19 million higher than the prior year as a result of recent acquisitions.

Other Operating Expense, Net

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For the year ended December 31, 2023, other operating expense, net principally includes a $29 million impairment charge on certain long-lived assets related to the shutdown of a business and, to a lesser extent, an $11 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.

For the year ended December 31, 2022, other operating expense, net includes a $14 million impairment charge on certain property, plant and equipment and a $5 million loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions, partially offset by a $10 million gain from a payroll tax credit under the CARES Act associated with the retention of employees.

Interest Expense, Net

Interest expense, net increased by $14 million for the year ended December 31, 2023 compared to the prior year, primarily due to increased borrowings associated with the issuance of the 2033 Senior Notes (see "2023 Highlights" above) and our secured receivables credit facility.

Interest expense, net increased by $49 million for the year ended December 31, 2024 compared to the prior year, primarily due to the issuance during November 2023 of $750 million aggregate principal amount of 6.40% senior notes due 2033 and the issuance in August 2024 of $1.85 billion aggregate principal amount of Senior Notes (see "2024 Highlights" above), partially offset by increased interest income (principally due to higher cash on hand) and lower borrowings under our secured receivables credit facility.

Other Income (Expense), Net

Other income (expense), net represents miscellaneous income and expense items related to non-operating activities, such as gains and losses associated with investments and other non-operating assets.

Other income, net represents miscellaneous income and expense items related to non-operating activities, such as gains and losses associated with investments and other non-operating assets.

For the year ended December 31, 2024, other income (expense), net included included $18 million of gains associated with investments in our deferred compensation plans and an $8 million gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition.

For the year ended December 31, 2023, other income (expense), net included $20 million of gains associated with investments in our deferred compensation plans.

For the year ended December 31, 2022, other income (expense), net included $30 million of losses associated with changes in the carrying value of our strategic investments and $25 million of losses associated with investments in our deferred compensation plans.

Income Tax Expense

Income tax expense for the years ended December 31, 2024 and 2023 was $273 million and $248 million, respectively.

The decrease in income tax expense compared to the prior year was primarily driven by a decrease in income before income taxes and equity in earnings of equity method investees.

The increase in income tax expense compared to the prior year was driven by an increase in the effective income tax rate and an increase in income before income taxes and equity in earnings of equity method investees.

The effective income tax rate for the years ended December 31, 2024 and 2023 was 23.2% and 22.0%, respectively.

The year ended December 31, 2022 includes an $18 million income tax benefit due to a cumulative adjustment to state deferred tax liabilities related to depreciation expense, which impacted the effective income tax rate by 1.5%.

In addition, the effective income tax rates benefited from $11 million and $14 million of excess tax benefits associated with stock-based compensation arrangements for the years ended December 31, 2023 and 2022, respectively.

The increase was principally due to a change in return to provision true-ups.

The effective income tax rates benefited from $9 million and $11 million of excess tax benefits associated with stock-based compensation arrangements for the years ended December 31, 2024 and 2023, respectively.

Equity in Earnings of Equity Method Investees, Net of Taxes

For the year ended December 31, 2023, there was a $18 million decrease in equity in earnings of equity method investees, net of taxes, compared to the prior year primarily due to lower demand for COVID-19 testing services at our diagnostic information services joint venture.

For the year ended December 31, 2024, there was a $7 million decrease in equity in earnings of equity method investees, net of taxes, compared to the prior year primarily due to a $12 million increase in losses associated with changes in the carrying value of our strategic investments, partially offset by increased demand for testing services at our diagnostic information services joint venture.

Quantitative and Qualitative Disclosures About Market Risk

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We seek to mitigate the variability in cash outflows that result from changes in interest rates by maintaining a balanced mix of fixed-rate and variable-rate debt obligations.

In order to achieve this objective, we have historically entered into interest rate swap agreements.

In order to achieve this objective, we have entered into interest rate swap agreements.

Interest rate swap agreements involve the periodic exchange of payments without the exchange of underlying principal or notional amounts.

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As of December 31, 2024, there were no borrowings outstanding under either our $600 million secured receivables credit facility or our $750 million senior unsecured revolving credit facility.

During the fourth quarter of 2023, we entered into forward-starting interest rate swap agreements with several financial institutions for a total notional amount of $500 million.

The agreements were entered into to hedge a portion of our interest rate exposure associated with variability in future cash flows attributable to changes in interest rates over a ten-year period related to an anticipated issuance of debt and were accounted for as cash flow hedges.

In connection with the issuance of the 2033 Senior Notes, these agreements were settled and we received $1 million.

These gains are deferred in stockholders' equity, net of taxes, as a component of accumulated other comprehensive loss, and amortized as an adjustment to interest expense, net over a ten-year period.

A hypothetical 10% change to the variable rate component of our variable rate indebtedness would not materially change our annual interest expense.

During October 2024, we entered into various fixed-to-variable interest rate swap agreements with an aggregate notional amount of $700 million and various interest rates ranging from SOFR plus a spread of 1.40% to SOFR plus a spread of 1.43%.

These derivative financial instruments are accounted for as fair value hedges of a portion of our 2034 Senior Notes.

The aggregate fair value of these fixed-to-variable interest rate swap agreements was $34 million, in a liability position, as of December 31, 2024.

Based on our net exposure to interest rate changes, a hypothetical 10% change to the variable rate component of our variable rate indebtedness would not materially change our annual interest expense.

A hypothetical 10% change in the SOFR curve (representing a 41 basis points change in the weighted average yield) would potentially change the fair value of our fixed-to-variable interest rate swap liabilities by $23 million.

For further details regarding our outstanding debt and our financial instruments and hedging activities, see Notes 13 and 15, respectively, to the audited consolidated financial statements.

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Our investment portfolio primarily includes equity investments comprised mostly of strategic holdings in companies concentrated in the life sciences and healthcare industries.

Equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) with readily determinable fair values are measured at fair value in prepaid expenses and other current assets in our consolidated balance sheet with changes in fair value recorded in current earnings in our consolidated statement of operations.

current earnings in our consolidated statement of operations.

Equity investments that do not have readily determinable fair values (which consist of investments in preferred and common shares of private companies) are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes.

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Net cash used in investing activities (2,548) (1,061) (1,487)

Net cash provided by (used in) financing activities 160 (1,732) 1,892

Net cash provided by financing activities 1,084 160 924

Effect of exchange rate changes on cash and cash equivalents and restricted cash (7) — (7)

Net change in cash and cash equivalents and restricted cash $ (137) $ 371 $ (508)

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Cash Flows from Operating Activities

Net cash provided by operating activities for the year ended December 31, 2023 was $1,272 million, and decreased $446 million compared to the prior year primarily as a result of:

• lower operating income in 2023 as compared to 2022;

• a year-over-year change in the timing and extent of the collection of COVID-19 testing revenues.

Net cash provided by operating activities for the year ended December 31, 2024 was $1,334 million, and increased $62 million compared to the prior year primarily as a result of increased operating income.

Days sales outstanding ("DSO"), a measure of billing and collection efficiency, was 48 days as of December 31, 2024 and 50 days as of December 31, 2023.

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Net cash used in investing activities for the years ended December 31, 2024 and 2023 was $2,548 million and $1,061 million, respectively.

The $518 million increase in net cash used in investing activities for the year ended December 31, 2023 compared to the prior year period was primarily a result of increased cash used for business acquisitions (see "2023 Highlights" for further discussion).

The $1,487 million increase in net cash used in investing activities for the year ended December 31, 2024, compared to the prior year period, was primarily a result of increased cash used for business acquisitions (see "2024 Highlights" above).

Cash Flows from Financing Activities

Net cash provided by (used in) financing activities for the year ended December 31, 2023 was $160 million, compared to $(1,732) million for the year ended December 31, 2022.

The $1,892 million change in net cash provided by (used in) financing activities was primarily a result of a $1,133 million decrease in share repurchases and, to a lesser extent, 2023 including $750 million of proceeds from the issuance of the 2033 Senior Notes (see "2023 Highlights" for further discussion).

Net cash provided by financing activities for the year ended December 31, 2024 was $1,084 million, compared to $160 million for the year ended December 31, 2023.

The $924 million increase in net cash provided by financing activities was primarily a result of the issuance of $1.85 billion aggregate principal amount of Senior Notes in August 2024 (see "2024 Highlights" above) and fewer share repurchases during the year ended December 31, 2024.

Such impacts were partially offset by, among other things, in the year ended December 31, 2023, the $750 million of gross proceeds received in connection with

the issuance of 6.40% senior notes and, in the year ended December 31, 2024, by the repayment in full of the outstanding indebtedness under our $300 million of 4.25% senior notes.

During the year ended December 31, 2024, there were no borrowings or repayments under our secured receivables credit facility or our senior unsecured revolving credit facility.

During the year ended December 31, 2023, we borrowed $1.7 billion under our secured receivables credit facility, which was repaid prior to December 31, 2023.

Additionally, during the year ended December 31, 2023, we borrowed $125 million under our senior unsecured revolving credit facility, which was repaid prior to December 31, 2023.

During the year ended December 31, 2022, there were no borrowings or repayments under our secured receivables credit facility or our senior unsecured revolving credit facility.

For details regarding our debt and related transactions, see Note 13 to the audited consolidated financial statements.

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During each of the four quarters of 2023, our Board of Directors declared a quarterly cash dividend of $0.71 per common share.

In February 2024, we announced that our Board of Directors authorized a 5.6% increase in our quarterly cash dividend from $0.71 to $0.75 per share, or $3.00 per share annually, commencing with the dividend payable in April 2024.

In January 2025, we announced that our Board of Directors authorized a 6.7% increase in our quarterly cash dividend from $0.75 to $0.80 per share, or $3.20 per share annually, commencing with the dividend payable in April 2025.

Share Repurchases

In February 2023, our Board of Directors increased the size of our share repurchase program by $1 billion.

As of December 31, 2024, $0.9 billion remained available under our share repurchase authorization.

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For the year ended December 31, 2024, we repurchased 0.9 million shares of our common stock for $150 million.

For the year ended December 31, 2022, we repurchased 10.1 million shares of our common stock for $1.4 billion.

For the year ended December 31, 2023, we repurchased 2.0 million shares of our common stock for $276 million.

For further details regarding our share repurchases, see Note 16 to the audited consolidated financial statements.

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We estimate that we will invest approximately $500 million during 2025 for capital expenditures to support and grow our existing operations, principally related to investments in laboratory equipment and facilities, including laboratory automations and information technology to support our diagnostic offerings.

During October 2023, we amended our secured receivables credit facility.

Subsequent to the amendment, the entire $525 million facility can be used for borrowings.

Additionally, we can choose to utilize up to $150 million of such capacity to issue letters of credit (see Note 19).

Issued letters of credit reduce the available borrowing capacity under the facility.

Further, the amended facility includes an additional $75 million uncommitted accordion which, if utilized, brings the total capacity under the facility to $600 million.

The amendment extended the maturity of the entire facility to October 2025.

Subsequent to the amendment, interest on borrowings under the facility will be based on either commercial paper rates for highly-rated issuers or adjusted Term SOFR, plus a spread of 0.80%.

We have $600 million of 3.50% senior notes due March 2025.

In February 2025, we committed to a multi-year project ("Project Nova") to modernize our "Order to Cash" business processes including related information technology infrastructure and underlying enabling technologies.

We expect to deliver value throughout the implementation of Project Nova, as it unlocks a variety of streamlined operational benefits, reduced technology-related operating costs, accelerated revenue opportunities and improvements to the customer and patient experience.

Total project-related cash expenditures are estimated to be approximately $250 million to $310 million with approximately 60% consisting of capital expenditures and;

the remainder consisting of operating expenses (primarily related to system conversion costs, compensation costs associated with team members dedicated to the project, and program management and training costs) to be incurred over the life of the project with the final phases expected to be completed in the 2031 to 2032 timeframe.

We expect to fund the Project Nova-related expenditures with cash from operations.

For 2025, total project-related cash expenditures are estimated to be approximately $15 million.

Annual financial benefits are projected to increase over time as major elements of the project are completed generating an appropriate return on investment.

During November 2024, we amended our $600 million secured receivables credit facility.

The amendment extended the maturity of the facility to November 2026.

Additionally, the amended facility includes a $200 million uncommitted accordion which, if utilized, brings the total capacity under the facility to $800 million.

For further details regarding our credit facilities, see Note 13 to the audited consolidated financial statements.

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As of December 31, 2024, we were in compliance with all such applicable financial covenants.

We believe that our cash and cash equivalents and cash from operations, together with our borrowing capacity under our credit facilities, will provide sufficient financial flexibility to fund seasonal and other working capital requirements, capital expenditures, debt service requirements and other obligations, cash dividends on common shares, share repurchases and additional growth opportunities for the foreseeable future.

However, should it become necessary, we believe that our credit profile should provide us with access to additional financing in order to fund normal business operations, make interest payments, fund growth opportunities and satisfy upcoming debt maturities.

However, should it become necessary, we believe that our credit profile should provide us with access to additional financing in order to fund normal business operations, make interest payments, fund additional growth opportunities, including acquisitions, and satisfy upcoming debt maturities.

Impact of New Accounting Standards

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

On August 23, 2024, the Company completed its acquisition of LifeLabs, Inc.

and the partnership interests of BPC Lab Finance LP (collectively, "LifeLabs").

While the Company has extended its oversight and monitoring processes that support internal control over financial reporting, as well as its disclosure controls and procedures, the Company continues to integrate the acquired operations of LifeLabs.

As such the Company has excluded LifeLabs from its evaluation of internal control over financial reporting.

This exclusion is in accordance with the U.S.

Securities and Exchange Commission’s guidance that a recently acquired business may be omitted from the assessment scope for up to one year from the date of acquisition.

LifeLabs had total assets that represented approximately 3% of the Company’s consolidated total assets as of December 31, 2024, and total revenues that represented approximately 2% of the Company’s consolidated revenues for the year ended December 31, 2024.

PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited the financial statements included in this annual report, audited the Company's internal control over financial reporting as of December 31, 2024 and issued their audit report on the Company's internal control over financial reporting included herein.

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We believe that our audits provide a reasonable basis for our opinions.

As described in the Report of Management on Internal Control Over Financial Reporting, management has excluded LifeLabs, Inc.

and BPC Lab Finance LP (collectively, “LifeLabs”) from its assessment of internal control over financial reporting as of December 31, 2024, because it was acquired by the Company in a purchase business combination during 2024.

We have also excluded LifeLabs from our audit of internal control over financial reporting.

LifeLabs is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent 3% and 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Definition and Limitations of Internal Control over Financial Reporting

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Diagnostic Information Services (DIS) Business Accounts Receivable - Contractual Allowances

As described in Note 3 to the consolidated financial statements, management estimates the amount of consideration it expects to be entitled to receive from customer groups in exchange for providing services using the portfolio approach.

As described in Note 3 to the consolidated financial statements, management estimates the amount of consideration the Company expects to be entitled to receive from payer 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 portfolio approach includes the following groups of customers:

healthcare insurers, government payers, client payers and patients (24%, 7%, 45% and 20% of consolidated net accounts receivable as of December 31, 2023, respectively, as disclosed by management).

The DIS business accounted for 96% of consolidated net accounts receivable ($1,210 million) as of December 31, 2023.

Net revenues and accounts receivable recognized from healthcare insurers and government payers consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical denial and collection experience and, additionally for healthcare insurers, the terms of the Company’s contractual arrangements.

As disclosed by management, the process for estimating revenues and the ultimate collection of receivables associated with the DIS business involves significant assumptions and judgments.

The principal considerations for our determination that performing procedures relating to the valuation of DIS business accounts receivable - contractual allowances is a critical audit matter are the estimate of net collectible accounts receivable, specifically contractual allowances, involves significant judgment and estimation on the part of management;

this in turn led to significant auditor judgment, subjectivity and effort in performing procedures to evaluate the audit evidence related to the contractual allowances.

The Company's consolidated accounts receivable, net of allowance for credit losses, balance as of December 31, 2024, was $1,304 million, of which a significant portion related to the DIS business.

Net revenues recognized from healthcare insurers and government payers consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical denial and collection experience and, additionally for healthcare insurers, the terms of the Company’s contractual arrangements.

The process for estimating revenues and the ultimate collection of accounts receivable associated with the DIS business involves significant judgment and estimation.

The principal considerations for our determination that performing procedures relating to the valuation of DIS business accounts receivable - contractual allowances is a critical audit matter are (i) the significant judgment by management when developing the estimate of contractual allowances, and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to the estimate of contractual allowances.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the valuation of DIS business accounts receivable, which included controls over management’s methodology and data used to estimate contractual allowances.

These procedures also included, among others, testing management's process for developing the estimate for contractual allowances, including (i) evaluating the appropriateness of the methodology, (ii) testing the completeness and accuracy of the historical contractual allowance and collection data from the Company’s billing system, which is an input to the methodology, and (iii) evaluating the reasonableness of management’s assumptions used to estimate contractual allowances by comparing actual cash collected to the prior year estimate (net accounts receivable).

These procedures also included, among others, testing management's process for developing the estimate of contractual allowances, including (i) evaluating the appropriateness of the methodology;

(ii) testing, on a sample basis, the completeness and accuracy of the historical contractual allowance and collection data used in developing the estimate of contractual allowances;

and (iii) evaluating the reasonableness of management’s assumptions used to estimate contractual allowances by comparing actual cash collected to the prior year estimate of net accounts receivable.

Acquisition of LifeLabs – Valuation of Customer-Related and Trade Name Intangible Assets

As described in Note 6 to the consolidated financial statements, on August 23, 2024, the Company acquired LifeLabs for net consideration of $1,003 million.

Of the acquired assets, $335 million of customer-related intangible assets and $99 million of trade name intangible assets were recorded.

The fair values of the customer-related intangible assets and trade name intangible assets were determined by management using a multi-period excess earnings method and a relief from royalty method,

respectively.

Management’s estimates of fair values were principally determined based on projections of cash flows and include significant judgments and assumptions relating to customer attrition rates for the customer-related intangible assets and royalty rates for the trade name intangible assets.

The projected cash flows were discounted to determine the present value of the assets at the date of the acquisition.

The principal considerations for our determination that performing procedures relating to the valuation of customer-related and trade name intangible assets acquired in the acquisition of LifeLabs is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the customer-related and trade name intangible assets acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to projections of cash flows, customer attrition rate, and discount rate for the customer-related intangible assets and projections of cash flows, royalty rate, and discount rate for the trade name intangible assets;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer-related and trade name intangible assets acquired.

These procedures also included, among others (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimates of the customer-related and trade name intangible assets acquired;

(iii) evaluating the appropriateness of the multi-period excess earnings and relief from royalty methods used by management;

(iv) testing the completeness and accuracy of the underlying data used in the multi-period excess earnings and relief from royalty methods;

and (v) evaluating the reasonableness of the significant assumptions used by management related to projections of cash flows, customer attrition rate, and discount rate for the customer-related intangible assets and projections of cash flows, royalty rate, and discount rate for the trade name intangible assets.

Evaluating management’s assumptions related to projections of cash flows for the customer-related and trade name intangible assets involved considering (i) the current and past performance of the LifeLabs business;

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings and relief from royalty methods and (ii) the reasonableness of the customer attrition rate and discount rate assumptions for the customer-related intangible assets and the royalty rate and discount rate assumptions for the trade name intangible assets.

/s/ PricewaterhouseCoopers LLP

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Amortization of intangible assets 127 108 120

Other operating expense (income), net 41 11 ( 2 )

Other operating expense, net 1 41 11

Total operating costs and expenses, net 8,526 7,990 8,455

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Other income (expense), net 30 20 ( 55 )

Total non-operating (expense) income, net ( 132 ) ( 193 ) 218

Total non-operating expense, net ( 171 ) ( 132 ) ( 193 )

Income before income taxes and equity in earnings of equity method investees 1,175 1,130 1,235

16 unchanged sentences

Foreign currency translation adjustment ( 76 ) 5 ( 8 )

Net change in available-for-sale debt securities, net of taxes — — ( 7 )

Net deferred gains on cash flow hedges, net of taxes 2 2 1

Other comprehensive income (loss) 7 ( 7 ) 7

Other comprehensive (loss) income ( 74 ) 7 ( 7 )

Comprehensive income 847 915 1,008

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Provision for credit losses 5 1 3

Deferred income tax (benefit) provision ( 49 ) 1 ( 57 )

Deferred income tax provision (benefit) 13 ( 49 ) 1

Stock-based compensation expense 88 77 77

Gain on disposition of joint venture — — ( 314 )

Other, net 15 41 66

7 unchanged sentences

Business acquisitions, net of cash acquired ( 2,164 ) ( 611 ) ( 144 )

Proceeds from disposition of joint venture — — 755

Capital expenditures ( 425 ) ( 408 ) ( 404 )

(Increase) decrease in investments and other assets, net ( 42 ) 5 —

Net cash (used in) provided by investing activities ( 1,061 ) ( 543 ) 21

Other investing activities, net 41 ( 42 ) 5

Net cash used in investing activities ( 2,548 ) ( 1,061 ) ( 543 )

Cash flows from financing activities:

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Net cash provided by (used in) financing activities 1,084 160 ( 1,732 )

Effect of exchange rate changes on cash and cash equivalents and restricted cash ( 7 ) — —

Net change in cash and cash equivalents and restricted cash ( 137 ) 371 ( 557 )

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Interests Total Stock-holders’

Equity Redeemable Non-controlling Interest

Balance, December 31, 2021 119 $ 2 $ 2,260 $ 7,649 $ ( 14 ) $ ( 3,453 ) $ 39 $ 6,483

Net income 946 62 1,008

Other comprehensive income, net of tax 7 7

Other comprehensive loss, net of tax ( 7 ) ( 7 )

Dividends declared ( 305 ) ( 305 )

2 unchanged sentences

Issuance of common stock under benefit plans

1 ( 36 ) 64 28

Stock-based compensation expense

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( 10 ) ( 18 ) ( 28 )

Purchase of treasury stock ( 16 ) ( 2,222 ) ( 2,222 )

Retirement of treasury stock ( 649 ) ( 3,342 ) 3,991 —

Purchases of treasury stock ( 10 ) ( 1,385 ) ( 1,385 )

Balance, December 31, 2022 111 $ 2 $ 2,295 $ 8,290 $ ( 21 ) $ ( 4,673 ) $ 37 $ 5,930

Net income 854 49 903

Other comprehensive loss, net of tax ( 7 ) ( 7 )

Other comprehensive income, net of tax 7 7

Dividends declared ( 319 ) ( 319 )

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Balance, December 31, 2023 111 $ 2 $ 2,320 $ 8,825 $ ( 14 ) $ ( 4,826 ) $ 35 $ 6,342

Other comprehensive income, net of tax 7 7

Other comprehensive loss, net of tax ( 74 ) ( 74 )

Dividends declared

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Issuance of common stock under benefit plans

1 ( 39 ) 66 27

Stock-based compensation expense 88 88

Exercise of stock options

1 ( 3 ) 75 72

Shares to cover employee payroll tax withholdings on stock issued under stock-based compensation plans

( 6 ) ( 18 ) ( 24 )

Acquisition of additional ownership interest in subsidiary ( 3 ) ( 3 )

Purchases of treasury stock ( 1 ) ( 150 ) ( 150 )

( 2 ) ( 276 ) ( 276 )

Balance, December 31, 2024 111 $ 2 $ 2,361 $ 9,360 $ ( 88 ) $ ( 4,857 ) $ 35 $ 6,813

10 unchanged sentences

Other customers include health plans, employers, emerging retail healthcare providers, government agencies, pharmaceutical companies and other commercial clinical laboratories.

The Company offers broad access to clinical testing through a nationwide network of laboratories, patient service centers, phlebotomists in physician offices, and connectivity resources, including call centers and mobile phlebotomists, nurses and other health and wellness professionals.

The Company offers broad access to clinical testing through a network of laboratories, patient service centers, phlebotomists in physician offices, and connectivity resources, including call centers and mobile phlebotomists, nurses and other health and wellness professionals.

The Company's large in-house staff of medical and scientific experts, including medical directors, scientific directors, genetic counselors and board-certified geneticists, provide medical and scientific consultation to healthcare providers and patients regarding the Company's tests and test results, and help them best utilize Quest Diagnostics' services to improve outcomes and enhance satisfaction.

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The Company reviews its investments in equity method investees for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

Use of Estimates

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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(in millions unless otherwise indicated)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“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.

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.

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The Company recognizes as revenue the amount that reflects the consideration to which it expects to be entitled in exchange for goods sold or services rendered primarily upon completion of the testing process (when results are reported) or when services have been rendered (see Note 3).

Net revenues from Medicare and Medicaid programs were approximately 11 %, 11 % and 10 % of the Company's consolidated net revenues for the years ended December 31, 2023, 2022 and 2021, respectively.

Net revenues from Medicare and Medicaid programs were approximately 11 % of the Company's consolidated net revenues for each of the years ended December 31, 2024, 2023 and 2022.

Net revenues from government programs in Canada were approximately 2 % of the Company's consolidated net revenues for the year ended December 31, 2024.

Taxes on Income

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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.

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(in millions unless otherwise indicated)

Stock-Based Compensation

7 unchanged sentences

For further details regarding stock-based compensation, see Note 17.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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(in millions unless otherwise indicated)

Fair Value Measurements

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Resulting translation adjustments are recorded as a component of accumulated other comprehensive loss within stockholders' equity.

Gains and losses from foreign currency transactions, which are denominated in a currency other than the functional currency, are included within other operating expense (income), net in the consolidated statements of operations.

Gains and losses from foreign currency transactions, which are denominated in a currency other than the functional currency, are included within other operating expense, net in the consolidated statements of operations.

Foreign currency transaction gains and losses have historically not been material.

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Cash and cash equivalents include all highly-liquid investments with original maturities, at the time acquired by the Company, of three months or less.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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(in millions unless otherwise indicated)

Concentration of Credit Risk

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To reduce risk, the Company routinely assesses the financial strength of these payers and, consequently, believes that its accounts receivable credit risk exposure, with respect to these payers, is limited.

While the Company has receivables due from federal and state governmental agencies, the Company does not believe that such receivables represent a credit risk since the related healthcare programs are funded by federal and state governments, and payment is primarily dependent on submitting appropriate documentation timely.

While the Company has receivables due from federal, state and foreign governmental agencies, the Company does not believe that such receivables represent a credit risk since the related healthcare programs are funded by federal, state and foreign governments, and payment is primarily dependent on submitting appropriate documentation timely.

As of December 31, 2024 and 2023, receivables due from government payers under the Medicare and Medicaid programs represented approximately 6 % and 7 %, respectively, of the Company's consolidated net accounts receivable.

As of December 31, 2024, receivables due from Canadian government payers represented approximately 1 % of the Company's consolidated net accounts receivable.

The portion of the Company's accounts receivable due from patients comprises the largest portion of credit risk.

As of December 31, 2023 and 2022, receivables due from patients represented approximately 20 % and 18 %, respectively, of the Company's consolidated net accounts receivable.

As of both December 31, 2024 and 2023, receivables due from patients represented approximately 20 % of the Company's consolidated net accounts receivable.

The Company applies assumptions and judgments including historical collection experience (including the period of time that the receivables have been outstanding) for assessing collectability and determining net revenues and accounts receivable from patients.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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(in millions unless otherwise indicated)

Accounts Receivable and Allowance for Credit Losses

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To the extent that any individual payers are identified that have deteriorated in credit quality, the Company removes the customers from their respective pools and establishes allowances based on the individual risk characteristics of such customers.

Inventories, which consist principally of finished goods testing supplies and reagents, are valued at the lower of cost (first in, first out method) or net realizable value.

Inventories, which consist principally of finished goods testing supplies and reagents, are valued at the lower of cost (principally first in, first out method) or net realizable value.

Property, Plant and Equipment

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• computer software developed or obtained for internal use, principally five to ten years .

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

Goodwill represents the excess of the fair value of the acquiree (including the fair value of non-controlling interests) over the recognized bases of the net identifiable assets acquired and includes the future economic benefits from other assets that could not be individually identified and separately recognized.

5 unchanged sentences

the qualitative test may be performed prior to, or as an alternative to, performing a quantitative goodwill impairment test.

If, after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company is required to perform the quantitative goodwill impairment test.

If, after assessing the totality of events or circumstances, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

carrying value, then the Company is required to perform the quantitative goodwill impairment test.

Otherwise, no further analysis is required.

6 unchanged sentences

The Company performs its annual impairment test during the fourth quarter of the fiscal year.

For the year ended December 31, 2023, in accordance with its policy to perform the quantitative test on a periodic basis, the Company updated the fair value calculation of its reporting units, performed the quantitative impairment test and concluded that goodwill was no t impaired.

For the year ended December 31, 2022, the Company performed a qualitative impairment test for its DIS reporting unit and, based on the totality of information available, the Company concluded that it was more-likely-than-not that the estimated fair value of its DIS reporting unit was greater than the carrying value of the reporting unit and, as such, no further analysis was required.

For the year ended December 31, 2022, the Company updated the fair value calculation of its risk assessment services reporting unit, performed the quantitative impairment test and concluded that goodwill for the reporting unit was no t impaired.

For the year ended December 31, 2024, the Company performed a qualitative impairment test and, based on the totality of information available for the reporting units, the Company concluded that it was more likely than no t that the estimated fair values of the reporting units were greater than the carrying values of the reporting units and, as such, no further analysis was required.

For the year ended December 31, 2023, in accordance with its policy to perform a quantitative test on a periodic basis, the Company updated the fair value calculations for its reporting units, performed the quantitative impairment test, and concluded that goodwill was no t impaired.

Intangible Assets

Intangible assets are recognized at fair value, as an asset apart from goodwill if the asset (i) arises from contractual or other legal rights, or (ii) is separable.

Intangible assets, principally representing the cost of customer-related intangibles, non-competition agreements and technology acquired, are capitalized and amortized on the straight-line method over their expected useful lives, which generally range from five to twenty years .

Intangible assets with indefinite useful lives, consisting principally of acquired tradenames, are not amortized, but instead are periodically reviewed for impairment.

Intangible assets, principally representing the cost of customer-related intangible assets, non-competition agreements, acquired technology-related intangible assets and trade name intangible assets, are capitalized and amortized on the straight-line method over their expected useful lives, which generally range from five to twenty-five years .

Intangible assets with indefinite useful lives, consisting principally of acquired trade names, are not amortized, but instead are periodically reviewed for impairment.

The Company reviews indefinite-lived intangible assets periodically for impairment and an impairment charge is recorded in the periods in which the recorded carrying value of an indefinite-lived intangible asset is more than its estimated fair value.

1 unchanged sentence

Based upon the Company’s most recent annual impairment tests completed during the fourth quarter of the years ended December 31, 2024 and 2023, the Company concluded that indefinite-lived intangible assets were not impaired.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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(in millions unless otherwise indicated)

The Company reviews the recoverability of its long-lived assets (including amortizable intangible assets), other than goodwill and indefinite-lived intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable.

1 unchanged sentence

If these cash flows are less than the carrying amount of such asset, an impairment loss is recognized for the difference between the estimated fair value and carrying amount of the asset.

During the fourth quarter of the year ended December 31, 2023, the Company recorded a $ 29 million impairment charge on certain long-lived assets related to the shutdown of a business.

See Note 5 for further discussion.

The Company's investments (except for those accounted for under the equity method of accounting) include:

4 unchanged sentences

See Note 7 for a discussion of the fair value of such investments.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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(in millions unless otherwise indicated)

• Equity investments that do not have readily determinable fair values consist of investments in preferred and common shares of privately held companies.

5 unchanged sentences

• Available-for-sale debt securities of privately-held companies.

These investments are measured at fair value with unrealized gains and losses presented in other comprehensive income (loss).

The carrying amount of these investments was $ 2 million as of both December 31, 2023 and 2022.

These investments are measured at fair value with unrealized gains and losses presented in other comprehensive (loss) income.

The carrying amount of these investments was $ 0 million and $ 2 million as of December 31, 2024 and 2023, respectively.

See Note 7 for a discussion of the fair value of such investments.

11 unchanged sentences

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.

In order to achieve this objective, the Company has entered into interest rate swap agreements.

Interest rate swap agreements 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.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

The Company accounts for these derivatives as either an asset or liability measured at its fair value.

8 unchanged sentences

If it is probable that the forecasted transaction will not occur by the originally specified time period, the Company discontinues hedge accounting and any deferred gains or losses reported in accumulated other comprehensive loss are classified into earnings immediately.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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(in millions unless otherwise indicated)

Comprehensive Income (Loss)

7 unchanged sentences

New Accounting Standards

In March 2020, the Financial Accounting Standards Board ("FASB") issued a new accounting standard which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform due to the 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 which was discontinued because of reference rate reform.

The pronouncement was effective immediately and, due to an accounting update which the FASB issued in December 2022, can be applied to contract modifications through December 31, 2024.

The adoption of this standard did not have a material impact on the Company’s consolidated results of operations, financial position or cash flows.

In November 2023, the FASB issued a new accounting standard which will require companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker ("CODM").

The pronouncement is effective for annual filings for the year ended December 31, 2024.

The Company does not expect the adoption of this standard to have a material impact on its results of operations, financial position or cash flows.

The pronouncement is effective for annual filings for the year ended December 31, 2024 and for interim periods within the year ended December 31, 2025.

The adoption of this standard did not have a material impact on the Company's results of operations, financial position or cash flows.

In December 2023, the FASB issued a new accounting standard which will require companies to make additional income tax disclosures.

The pronouncement is effective for annual filings for the year ended December 31, 2025.

The Company does not expect the adoption of this standard to have a material impact on its results of operations, financial position or cash flows.

In March 2024, the Securities and Exchange Commission ("SEC") issued a rule which will require companies to make certain climate-related disclosures in periodic filings.

The rule includes certain disclosures in the footnotes of the financial statements:

• capitalized costs, expenditures expensed, and losses incurred as a result of severe weather events and other natural conditions, such as hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise;

• capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates if they are used as a material component of a registrant’s plans to achieve its disclosed climate-related targets or goals;

• whether estimates and assumptions used to produce the financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans.

The footnote disclosures were originally effective for annual filings for the year ended December 31, 2025.

However, in April 2024, the SEC voluntarily stayed implementation of the new disclosure requirements pending judicial review.

Once the litigation is resolved, and if the rule remains in effect, the SEC will announce a new effective date.

The Company is currently evaluating the impact of the adoption of the rule.

In November 2024, the FASB issued a new accounting standard which will require companies to disaggregate certain income statement expenses.

The pronouncement is effective for annual filings for the year ended December 31, 2027 and for interim periods within the year ended December 31, 2028.

The Company does not expect the adoption of this standard to have a material impact on its results of operations, financial position or cash flows.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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(in millions unless otherwise indicated)

Company does not expect the adoption of this standard to have a material impact on its results of operations, financial position or cash flows.

REVENUE RECOGNITION

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The portfolios determined using the portfolio approach consist of the following groups of payer customers:

healthcare insurers, government payers (Medicare and Medicaid programs), client payers and patients.

healthcare insurers, government payers, client payers and patients.

Contracts in the DIS business do not contain significant financing components based on the typical period of time between performance of services and collection of consideration.

14 unchanged sentences

Government Payers

Reimbursements from domestic government payers are based on fee-for-service schedules set by governmental authorities, including traditional Medicare and Medicaid.

Reimbursements from government payers in Canada are based on a combination of fee-for-service schedules, with a cap on maximum billings, and capitated arrangements.

Net revenues recognized for fee-for-service arrangements principally consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical denial and collection experience and other factors.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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(in millions unless otherwise indicated)

Reimbursements from government payers are based on fee-for-service schedules set by governmental authorities, including traditional Medicare and Medicaid.

Net revenues recognized consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical denial and collection experience and other factors.

Collection of the Company's net revenues from government payers is normally a function of providing the complete and correct billing information within the various filing deadlines and generally occurs within 30 days of billing.

28 unchanged sentences

Total healthcare insurers 40 40 41

Government payers 11 11 10

Government payers (principally fee-for-service) 13 11 11

Client payers 33 34 33

2 unchanged sentences

Net revenues 100 % 100 % 100 %

For the years ended December 31, 2023, 2022 and 2021, substantially all of the Company’s services were provided within the United States, see Note 20.

For the years ended December 31, 2024, 2023 and 2022, substantially all of the Company’s services were provided within the United States.

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").

LifeLabs provides laboratory diagnostic information and digital health connectivity systems in Canada.

See Note 6 for further discussion.

The approximate percentage of net accounts receivable by type of payer customer as of December 31, 2024 and 2023 was as follows:

45 unchanged sentences

Employee separation costs $ 28 $ 25 $ 55

Facility-related costs — — 1

Asset impairment charges — 29 14

2 unchanged sentences

Additionally, during the year ended December 31, 2023, the Company recorded an impairment charge on certain long-lived assets related to the shutdown of a business and, during the year ended December 31, 2022, the Company recorded an impairment charge on certain property, plant and equipment.

Of the total restructuring and impairment charges incurred during the year ended December 31, 2023, $ 13 million, $ 12 million and $ 29 million were recorded in cost of services, selling, general and administrative expenses and other operating expense (income), net, respectively.

Of the total restructuring and impairment charges incurred during the year ended December 31, 2022, $ 19 million, $ 36 million and $ 14 million were recorded in cost of services, selling, general and administrative expenses and other operating expense (income), net, respectively.

Of the total restructuring charges incurred during the year ended December 31, 2021, $ 8 million and $ 4 million were recorded in cost of services and selling, general and administrative expenses, respectively.

The employee separation costs for all periods presented were primarily recorded in the Company's DIS business.

Of the total restructuring and impairment charges incurred during the year ended December 31, 2024, $ 15 million and $ 13 million were recorded in cost of services and selling, general and administrative expenses, respectively.

Of the total restructuring charges incurred during the year ended December 31, 2022, $ 19 million, $ 36 million and $ 14 million were recorded in cost of services, selling, general and administrative expenses and other operating expense, net, respectively.

Charges for all periods presented were primarily recorded in the Company's DIS business.

The following table summarizes the activity of the restructuring liability during 2024 and 2023, which is included in accrued expenses in Note 12:

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2024 Acquisitions

During 2024, the Company completed acquisitions for an aggregate purchase price of $ 2.2 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 year ended December 31, 2023.

In the Company's consolidated statement of cash flows for the year ended December 31, 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 $ 1.1 billion, $ 862 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 periods.

Acquisition of select assets of Lenco Diagnostic Laboratories, Inc.

On February 12, 2024, the Company acquired select assets of Lenco, an independent clinical diagnostic laboratory provider serving physicians in New York, in an all-cash transaction for $ 111 million.

Acquisition of select assets of PathAI Diagnostics

On June 10, 2024, the Company acquired select assets of PathAI Diagnostics, a business that provides anatomic and digital pathology laboratory services, in an all-cash transaction for $ 100 million.

Acquisition of all of the issued and outstanding common shares of LifeLabs Inc.

and all of the partnership interests of BPC Lab Finance LP (collectively, "LifeLabs")

On August 23, 2024, the Company acquired 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, which is not expected to be material.

The Company funded the acquisition with a portion of the net proceeds from the issuance of senior notes (see Note 13 for further details).

Following the acquisition in August 2024, LifeLabs contributed $ 241 million to the Company's consolidated net revenues for the year ended December 31, 2024.

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 values of the customer-related intangible assets and the trade name intangible assets in the table below were determined by management using a multi-period excess earnings method, a form of the income approach, and a relief from royalty method, respectively.

Management’s estimates of fair value were principally determined based on projections of cash flows and include significant judgments and assumptions relating to customer attrition rates for the customer-related intangible assets and royalty rates for the trade name intangible assets.

The projected cash flows were discounted to determine the present values of the assets at the date of the acquisition.

The fair value of the customer-related intangible assets utilized discount rates ranging from 13.0 % to 14.0 % and the fair value of the trade name intangible assets utilized a 12.0 % discount rate.

Pro Forma Combined Financial Information

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(in millions unless otherwise indicated)

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 13), 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.

Year Ended December 31,

Pro forma net revenues $ 10,320 $ 9,917

Pro forma net income attributable to Quest Diagnostics $ 869 $ 842

Pro forma earnings per share attributable to Quest Diagnostics' common stockholders:

Basic $ 7.76 $ 7.47

Diluted $ 7.67 $ 7.38

Acquisition of select assets of the outreach laboratory services business of Allina Health ("Allina")

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.

Acquisition of the laboratory business of three physician groups in New York

On September 30, 2024, the Company acquired the laboratory business of three physician groups in New York in an all-cash transaction for $ 300 million.

Acquisition of select assets of the outreach laboratory services business of OhioHealth

On October 13, 2024, the Company acquired select assets of the outreach laboratory services business of OhioHealth, which serves providers and patients in Ohio, in an all-cash transaction for $ 200 million.

Acquisition of the outreach laboratory services business of University Hospitals

On December 30, 2024, the Company acquired the outreach laboratory services business of University Hospitals, which serves providers and patients in Ohio, in an all-cash transaction for $ 183 million.

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.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

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

Cash and cash equivalents $ 50 $ — $ — $ — $ — $ — $ 50

Accounts receivable 31 — — — — — 31

Other current assets 23 — — — — 2 25

Property, plant and equipment 250 — — — — 4 254

Finance lease assets (recorded in property, plant and equipment) — — — — — 17 17

Operating lease right-of-use assets 65 — — — — 17 82

Goodwill 303 243 175 146 125 154 1,146

Intangible assets 434 57 55 54 58 95 753

Other assets 39 — — — — — 39

Total assets acquired 1,195 300 230 200 183 289 2,397

Accounts payable and accrued expenses 66 — — — — — 66

Current portion of long-term operating lease liabilities 14 — — — — 4 18

Finance lease liabilities (recorded in long-term debt) — — — — — 17 17

Long-term operating lease liabilities 51 — — — — 13 64

Other liabilities 11 — — — — 7 18

Total liabilities assumed 142 — — — — 41 183

Net assets acquired $ 1,053 $ 300 $ 230 $ 200 $ 183 $ 248 $ 2,214

(a) Principally relates to the acquisitions of Lenco and PathAI Diagnostics.

The preliminary fair values of the acquired intangible assets are as follows:

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

Customer-related $ 335 $ 57 $ 55 $ 54 $ 43 $ 95 $ 639 15 - 25

Trade names 99 — — — — — 99 15

Non-competition agreements — — — — 15 — 15 5

$ 434 $ 57 $ 55 $ 54 $ 58 $ 95 $ 753

(a) Principally relates to the acquisitions of Lenco and PathAI Diagnostics.

2023 Acquisitions

During 2023, the Company completed acquisitions for an aggregate purchase price of $ 699 million (including contingent consideration initially estimated at $ 88 million), net of cash acquired, including the acquisitions discussed below.

The acquisitions preliminarily resulted in goodwill of $ 511 million, of which $ 244 million is deductible for tax purposes.

The acquisitions also preliminarily resulted in $ 145 million of technology-related intangible assets and $ 63 million of customer-related intangible assets.

The acquisitions resulted in goodwill of $ 511 million, of which $ 244 million is deductible for tax purposes.

The acquisitions also resulted in $ 145 million of technology-related intangible assets and $ 63 million of customer-related intangible assets.

Acquisition of select assets of the laboratory services business of New York-Presbyterian

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Under the contingent consideration obligation, the seller can receive up to $ 100 million of additional consideration dependent upon the achievement of certain revenue benchmarks through 2028 and up to an additional $ 50 million of consideration dependent upon the Company receiving reimbursement coverage from the Centers for Medicare and Medicaid Services ("CMS").

Based on the preliminary purchase price allocation, which may be revised as additional information becomes available during the measurement period, the assets acquired and liabilities assumed consist of $ 267 million of goodwill (none of which is tax-deductible), $ 145 million of technology-related intangible assets, $ 23 million of deferred income tax liabilities, $ 8 million of operating lease right-of-use assets and related operating lease liabilities, and $ 3 million of property, plant and equipment.

Based on the purchase price allocation, the assets acquired and liabilities assumed consist of $ 267 million of goodwill ( no ne of which is tax-deductible), $ 145 million of technology-related intangible assets, $ 23 million of deferred income tax liabilities, $ 8 million of operating lease right-of-use assets and related operating lease liabilities, and $ 3 million of property, plant and equipment.

The intangible assets are being amortized over a useful life of 15 years.

4 unchanged sentences

These acquisitions also resulted in $ 45 million of intangible assets, principally comprised of customer-related intangible assets.

Acquisition of Pack Health, LLC

On February 1, 2022, the Company acquired Pack Health, LLC ("Pack Health"), a patient engagement company that helps individuals adopt healthier behaviors to improve outcomes, in an all cash transaction for $ 123 million, net of $ 4 million cash acquired, which consisted of cash consideration of $ 105 million and contingent consideration initially estimated at $ 18 million.

Based on the purchase price allocation, the assets acquired and liabilities assumed consist of $ 96 million of goodwill (of which $ 78 million was tax-deductible on the acquisition date), $ 30 million of intangible assets, $ 5 million of operating lease right-of-use assets, $ 5 million of operating lease liabilities and $( 3 ) million of working capital.

The intangible assets consist primarily of customer-related assets which are being amortized over a useful life of 15 years.

2021 Acquisitions

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

1 unchanged sentence

(in millions unless otherwise indicated)

During 2021, the Company completed acquisitions for an aggregate purchase price of $ 346 million (including contingent consideration initially estimated at $ 15 million), net of cash acquired, including the acquisitions discussed below.

The 2021 acquisitions resulted in goodwill of $ 236 million, of which $ 221 million is deductible for tax purposes.

These acquisitions also resulted in $ 107 million of intangible assets, principally comprised of customer-related intangible assets.

Acquisition of the outreach laboratory services business of Mercy Health

On June 1, 2021, the Company completed the acquisition of the outreach laboratory services business of Mercy Health, which serves providers and patients in Arkansas, Kansas, Missouri and Oklahoma, in an all-cash transaction for $ 225 million.

Based on the purchase price allocation, the assets acquired primarily consist of $ 171 million of tax-deductible goodwill and $ 54 million of customer-related intangible assets.

The intangible assets are being amortized over a useful life of 15 years.

Acquisition of assets of Labtech Diagnostics, LLC

On December 13, 2021, the Company completed the acquisition of assets of Labtech Diagnostics, LLC ("Labtech"), an independent clinical diagnostic laboratory provider serving physicians and patients primarily in South Carolina, North Carolina, Florida and Georgia, in an all cash transaction for $ 95 million, which consisted of cash consideration of $ 80 million and contingent consideration initially estimated at $ 15 million.

Based on the purchase price allocation, the assets acquired and liabilities assumed consist of $ 48 million of goodwill (of which $ 33 million was tax deductible on the acquisition date), $ 44 million of intangible assets, $ 11 million of property, plant and equipment, $ 9 million of finance lease liabilities, $ 6 million of operating lease right-of-use assets, $ 6 million of operating lease liabilities, and $ 1 million of inventories.

Acquisition of Pack Health, LLC

On February 1, 2022, the Company acquired Pack Health, LLC, a patient engagement company that helps individuals adopt healthier behaviors to improve outcomes, in an all cash transaction for $ 123 million, net of $ 4 million cash acquired, which consisted of cash consideration of $ 105 million and contingent consideration initially estimated at $ 18 million.

The intangible assets consist primarily of customer-related assets which are being amortized over a useful life of 15 years.

2 unchanged sentences

As such, the assets acquired and liabilities assumed are recorded based on their estimated fair values as of the closing date.

Supplemental pro forma combined financial information has not been presented as the impact of the acquisitions is not material to the Company's consolidated financial statements.

The goodwill recorded primarily includes the expected synergies resulting from combining the operations of the acquired entities with those of the Company and the value associated with an assembled workforce and other intangible assets that do not qualify for separate recognition.

1 unchanged sentence

For further details regarding business segment information, see Note 19.

On April 1, 2021, the Company sold its 40 % ownership interest in Q 2 Solutions® ("Q 2 Solutions"), its clinical trials central laboratory services joint venture, to IQVIA Holdings, Inc.

("IQVIA"), its joint venture partner, for $ 760 million in an all-cash transaction.

Prior to the transaction, the Company accounted for its minority interest as an equity method investment.

As a result of the transaction, during the year ended December 31, 2021, the Company recorded a $ 314 million pre-tax gain in other income (expense), net in the consolidated statement of operations based on the difference between the net sales proceeds and the carrying value of the investment, including $ 20 million of cumulative translation losses which were previously recorded in accumulated other comprehensive loss.

During the year ended December 31, 2021, the Company also recorded $ 55 million of income tax expense related to the gain, consisting of $ 127 million of current income tax expense, partially offset by $ 72 million of deferred income tax benefit.

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.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

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Cash surrender value of life insurance policies 64 — 64 —

Available-for-sale debt securities 2 — — 2

Total $ 136 $ 72 $ 64 $ —

1 unchanged sentence

Contingent consideration 106 — — 106

Fixed-to-variable interest rate swaps 34 — 34 —

Total $ 280 $ — $ 174 $ 106

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The investments are recorded in other assets in the Company's consolidated balance sheet.

The fair value measurements of the Company's fixed-to-variable interest rate swaps classified within Level 2 of the fair value hierarchy, are model-derived valuations as of a given date in which all significant inputs are observable in active markets including certain financial information and certain assumptions regarding past, present and future market conditions.

In connection with the acquisition of Haystack (see Note 6 for further discussion), there is a contingent consideration obligation under which the seller can receive up to $ 100 million of additional consideration dependent upon the achievement of certain revenue benchmarks through 2028 and up to an additional $ 50 million of consideration dependent upon the Company receiving reimbursement coverage from the CMS.

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The portion of the contingent consideration obligation which is dependent upon the Company receiving reimbursement coverage from the CMS is also classified within Level 3 of the fair value hierarchy as the fair value is principally determined based on management's estimate, which is a significant input that is not observable.

Additionally, the fair value of the entire contingent consideration obligation was also impacted by a market discount rate ( 5 %) which adjusted the estimated payments to present value.

Such discount rate decreased the initial aggregate fair value of the contingent consideration obligation by $ 21 million.

Additionally, the fair value of the entire contingent consideration obligation is also impacted by a market discount rate ( 5 %) which adjusts the estimated payments to present value.

The fair value of the contingent consideration obligation is not overly sensitive to movements in the comparable company revenue volatility or the discount rate used for the portion of the obligation that is dependent upon the achievement of certain revenue benchmarks.

For example, changing the comparable company revenue volatility from 35 % to 25 % impacts the fair value by $ 5 million (assuming no other inputs are modified) and changing the discount rate from 10.5 % to 7.0 % impacts the fair value by $ 3 million (assuming no other inputs are modified).

Additionally, in connection with previous acquisitions, the Company had contingent consideration obligations based on the achievement of certain testing volume and revenue benchmarks during 2022.

The Company has additional contingent consideration obligations in connection with other acquisitions.

The liabilities related to such obligations are included in the amounts below.

The following table provides a reconciliation of the beginning and ending balances of liabilities using significant unobservable inputs (Level 3):

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Settlements ( 18 )

Total fair value adjustments included in earnings - realized/unrealized 5

Total fair value adjustments included in earnings - unrealized 11

Balance, December 31, 2023 104

1 unchanged sentence

Settlements ( 6 )

Total fair value adjustments included in earnings - realized/unrealized 11

Total fair value adjustments included in earnings - unrealized 2

Balance, December 31, 2024 $ 106

The $ 11 million and $ 5 million net losses included in earnings associated with the changes in the fair value of contingent consideration obligation for the years ended December 31, 2023 and 2022, respectively, are reported in other operating expense (income), net.

The $ 2 million and $ 11 million of net losses included in earnings associated with the changes in the fair value of the contingent consideration obligation for the years ended December 31, 2024 and 2023, respectively, are reported in other operating expense, net.

The year-over-year decrease in the net losses was principally due to changes in the timing of estimated revenues for Haystack.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

2 unchanged sentences

Of the aggregate $ 106 million contingent consideration obligation as of December 31, 2024, $ 101 million and $ 5 million were included in other liabilities and accounts payable and accrued expenses, respectively, in the Company's consolidated balance sheet.

The entire $ 23 million contingent consideration obligation as of December 31, 2022 was included in accounts payable and accrued expenses in the Company's consolidated balance sheet.

Of the aggregate $ 104 million contingent consideration obligation as of December 31, 2023, $ 99 million and $ 5 million were included in other liabilities and accounts payable and accrued expenses, respectively, in the Company's consolidated balance sheet.

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.

40 unchanged sentences

Basis differences in investments, joint ventures and subsidiaries ( 4 ) ( 7 )

Net operating loss carryforwards, net of valuation allowance 48 49

Tax attribute carryforwards, net of valuation allowances and unrecognized tax position liabilities 60 48

Operating lease right-of-use assets ( 146 ) ( 149 )

3 unchanged sentences

As of December 31, 2024 and 2023, non-current deferred tax liabilities of $ 278 million and $ 270 million, respectively, are included in other liabilities in the consolidated balance sheet.

As of December 31, 2024 and 2023, non-current deferred tax assets of $ 28 million and $ 0 million , respectively, are included in other assets in the consolidated balance sheet.

As of December 31, 2024, the Company had estimated net operating loss carryforwards for federal and state income tax purposes of $ 6 million and $ 639 million, respectively, which expire at various dates through 2044.

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Settlements — ( 10 ) ( 24 )

Foreign deferred tax assets reduction 28 — —

Balance, end of year $ 124 $ 90 $ 94

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Accruals for penalties have historically been immaterial.

Interest expense (income) included in income tax expense in each of the years ended December 31, 2023, 2022 and 2021 was approximately $ 5 million, $ 3 million and $( 2 ) million, respectively.

Interest expense included in income tax expense in each of the years ended December 31, 2024, 2023 and 2022 was approximately $ 7 million, $ 5 million and $ 3 million, respectively.

As of December 31, 2024 and 2023, the Company had approximately $ 24 million and $ 17 million, respectively, accrued, net of the benefit of a federal and state deduction, for the payment of interest on uncertain tax positions.

42 unchanged sentences

Costs incurred during the year ended December 31, 2022 will be donated and contributed over several years.

During the years ended December 31, 2024, 2023 and 2022, other financing activities, net in the Company's consolidated statement of cash flows included changes in bank overdrafts, which are generally settled in cash in the short term, of $ 33 million, $ 36 million and $( 24 ) million, respectively.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

18 unchanged sentences

Principally all of the Company’s goodwill as of December 31, 2024 and 2023 was associated with its DIS business.

For the year ended December 31, 2024, goodwill acquired was principally associated with the acquisitions of LifeLabs, the laboratory business of three physician groups in New York, select assets of the outreach laboratory services business of Allina Health, select assets of the outreach laboratory services business of OhioHealth and the outreach laboratory services business of University Hospitals (see Note 6).

For the year ended December 31, 2024, adjustments to goodwill related to foreign currency translation.

For the year ended December 31, 2023, goodwill acquired was principally associated with the acquisitions of Haystack and select assets of the laboratory services business of New York-Presbyterian (see Note 6).

For the year ended December 31, 2023, adjustments to goodwill related to foreign currency translation.

For the year ended December 31, 2022, goodwill acquired was principally associated with the acquisition of Pack Health (see Note 6).

For the year ended December 31, 2022, adjustments to goodwill related to an adjustment of the purchase price allocation for Labtech, partially offset by foreign currency translation.

Intangible assets as of December 31, 2024 and 2023 consisted of the following:

8 unchanged sentences

Customer-related 18 $ 2,274 $ ( 1,030 ) $ 1,244 $ 1,656 $ ( 924 ) $ 732

Technology 15 284 ( 90 ) 194 138 ( 81 ) 57

Technology-related 15 282 ( 108 ) 174 284 ( 90 ) 194

Trade names 15 143 ( 52 ) 91 50 ( 49 ) 1

Non-competition agreements 5 15 — 15 — — —

Other 10 64 ( 61 ) 3 64 ( 61 ) 3

5 unchanged sentences

$ 3,014 $ ( 1,251 ) $ 1,763 $ 2,290 $ ( 1,124 ) $ 1,166

During the fourth quarter of the year ended December 31, 2023, the Company recorded a $ 29 million impairment charge on certain long-lived assets related to the shutdown of a business.

During the year ended December 31, 2023, the Company recorded a $ 29 million impairment charge on certain long-lived assets related to the shutdown of a business.

Such charge principally related to customer-related intangible assets.

3 unchanged sentences

Thereafter 844

Total $ 1,527

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

1 unchanged sentence

Accrued wages and benefits (including incentive compensation) $ 479 $ 381

Trade accounts payable 378 324

Accrued expenses 306 287

Trade accounts payable 287 378

Overdrafts 162 129

Dividend payable 84 79

Accrued interest 64 26

Accrued insurance 40 36

Accrued interest 31 64

Merger consideration payable 5 5

Income taxes payable — 2

Total $ 1,394 $ 1,359

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

Long-term debt (including finance lease obligations) as of December 31, 2024 and 2023 consisted of the following:

2 unchanged sentences

3.45 % Senior Notes due June 2026

4.60 % Senior Notes due December 2027

4.20 % Senior Notes due June 2029

4.625 % Senior Notes due December 2029

2.95 % Senior Notes due June 2030

1 unchanged sentence

6.40 % Senior Notes due November 2033

5.00 % Senior Notes due December 2034

6.95 % Senior Notes due July 2037

6 unchanged sentences

Secured Receivables Credit Facility

The Company is party to a $ 525 million secured receivables credit facility (the “Secured Receivables Credit Facility”), which it amended in October 2023.

Subsequent to the amendment, the entire $ 525 million facility can be used for borrowings.

The Company is party to a secured receivables credit facility (the “Secured Receivables Credit Facility”).

Through August 2024, the facility included a $ 75 million uncommitted accordion which, at such time, the Company utilized in order to expand its total capacity under the facility to $ 600 million.

During November 2024, the Company amended the facility to extend the maturity to November 2026.

Additionally, the amended facility includes a $ 200 million uncommitted accordion which, if utilized, brings the total capacity under the facility to $ 800 million.

The entire facility can be used for borrowings.

Additionally, the Company can choose to utilize up to $ 150 million of such capacity to issue letters of credit (see Note 18).

Issued letters of credit reduce the available borrowing capacity under the facility.

Further, the amended facility includes an additional $ 75 million uncommitted accordion which, if utilized, brings the total capacity under the facility to $ 600 million.

The amendment extended the maturity of the entire facility to October 2025.

Subsequent to the amendment, interest on borrowings under the facility will be based on either commercial paper rates for highly-rated issuers or the adjusted Term Secured Overnight Financing Rate ("Term SOFR"), plus a spread of 0.80 %.

Interest on borrowings under the facility is based on either commercial paper rates for highly-rated issuers or the adjusted Term Secured Overnight Financing Rate ("Term SOFR"), plus a spread of 0.80 %.

Borrowings under the Secured Receivables Credit Facility are collateralized by certain domestic receivables.

The Secured Receivables Credit Facility is subject to customary affirmative and negative covenants and certain financial covenants with respect to the receivables that comprise the borrowing base and secure the borrowings under the facility.

The Secured Receivables Credit Facility is subject to customary affirmative and negative covenants and

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

certain financial covenants with respect to the receivables that comprise the borrowing base and secure the borrowings under the facility.

As of both December 31, 2024 and 2023, there were no outstanding borrowings under the Secured Receivables Credit Facility.

5 unchanged sentences

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 SOFR-based interest rate contracts for periods up to six months.

At the option of the Company, it may elect to lock into Term SOFR-based interest rate contracts for periods up to six months.

For interest on any U.S.

3 unchanged sentences

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 December 31, 2023 and 2022, there were no outstanding borrowings under the Senior Unsecured Revolving Credit Fa cility.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

In November 2023, the Company completed a senior notes offering, consisting of $ 750 million aggregate principal amount of 6.40 % senior notes due November 2033 (the "2033 Senior Notes").

The Company incurred $ 7 million of debt issuance costs associated with the 2033 Senior Notes, which are included as a reduction of the carrying amount of long-term debt and which are being amortized over the term of the related debt.

The Company expects to use the net proceeds from the offering for general corporate purposes, which may include the redemption or repayment of indebtedness including the Company's Senior Notes due April 2024.

As of both December 31, 2024 and 2023, there were no outstanding borrowings un der the Senior Unsecured Revolving Credit Facility.

Issuance of Senior Notes

In August 2024, the Company completed a $ 1.85 billion senior notes offering, consisting of $ 400 million aggregate principal amount of 4.60 % senior notes due December 2027 (the "2027 Senior Notes"), $ 600 million aggregate principal amount of 4.625 % senior notes due December 2029 (the "2029 Senior Notes") and $ 850 million aggregate principal amount of 5.00 % senior notes due December 2034 (the "2034 Senior Notes," and together with the 2027 Senior Notes and the 2029 Senior Notes, the "Senior Notes").

The Senior Notes were issued at an aggregate original issue discount of $ 4 million.

The Company incurred $ 15 million of debt issuance costs associated with the issuance of the Senior Notes, which are included as a reduction of the carrying amount of the Senior Notes and which are being amortized over the terms of the related Senior Notes.

The Company used a portion of the net proceeds from the Senior Notes offering to fund the purchase price and related transaction costs of the acquisition of LifeLabs (see Note 6).

The Company expects to use the balance of the net proceeds from the offering for general corporate purposes, which may include the redemption or repayment of indebtedness, including the Company's 3.50 % senior notes due March 2025.

Repayment of Senior Notes

During the year ended December 31, 2024, the Company repaid in full the outstanding indebtedness under the Company's $ 300 million of 4.25 % senior notes which matured on April 1, 2024.

3.50% Senior Notes due March 2025

The Company has $ 600 million of 3.50 % senior notes due March 2025.

The senior notes are included in current portion of long-term debt in the Company's December 31, 2024 consolidated balance sheet.

Such notes were included in long-term debt in the Company's December 31, 2023 consolidated balance sheet.

All of the senior notes are unsecured obligations of the Company and rank equally with the Company's other senior unsecured obligations.

2 unchanged sentences

For notes with the par value redemption option, if such notes are redeemed prior to the specified dates, the redemption price calculations exclude any interest that would have been due after such dates.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

Maturities of Long-Term Debt

54 unchanged sentences

2027 139 2 141

2028 105 2 107

Thereafter 120 17 137

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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.

During October 2024, the Company entered into various fixed-to-variable interest rate swap agreements which have a notional amount totaling $ 700 million and variable interest rates ranging from SOFR plus 1.40 % to SOFR plus 1.43 %.

These derivative financial instruments are accounted for as fair value hedges of a portion of the Company's 2034 Senior Notes.

As of December 31, 2024 and 2023, 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 December 31, 2023 December 31, 2022

Carrying Amount of Hedged Long-Term Debt Hedge Accounting Basis Adjustment (a) Carrying Amount of Hedged Long-Term Debt Hedge Accounting Basis Adjustment (a)

Balance Sheet Classification December 31, 2024 December 31, 2024 December 31, 2023 December 31, 2023

Long-term debt $ 658 $ ( 29 ) $ — $ 13

(a) As of both December 31, 2023 and 2022, the entire balance is associated with remaining unamortized hedging adjustments on discontinued relationships.

(a) The balance includes $ 5 million and $ 13 million of remaining unamortized hedging adjustments on discontinued relationships as of December 31, 2024 and 2023, respectively.

The following table presents the effect of fair value hedge accounting on the consolidated statement of operations for the year ended December 31, 2024:

Year ended December 31, 2024

Interest Expense, Net

Total for line item in which the effects of fair value hedges are recorded $ ( 201 )

Gain (loss) on fair value hedging relationships:

Hedged items (Long-term debt) $ 34

Derivatives designated as hedging instruments $ ( 34 )

A summary of the fair values of derivative instruments in the consolidated balance sheets was as follows:

December 31, 2024

Balance Sheet

Classification Fair Value

Derivatives Designated as Hedging Instruments

Fixed-to-variable interest rate swap agreements Other liabilities $ 34

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

STOCKHOLDERS’ EQUITY AND REDEEMABLE NONCONTROLLING INTEREST

8 unchanged sentences

• Foreign currency translation adjustments;

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

• 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 15).

• 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 years ended December 31, 2023, 2022, and 2021, 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.

For the years ended December 31, 2024, 2023, and 2022, the tax effects related to the deferred gains (losses) on cash flow hedges were not material.

Foreign currency translation adjustments related to indefinite investments in non-U.S.

1 unchanged sentence

The changes in accumulated other comprehensive loss by component for 2024, 2023 and 2022 were as follows:

Adjustments Net Changes in Available-for-Sale Debt Securities Net Deferred Gains on Cash Flow Hedges, net of tax Other Accumulated Other Comprehensive Loss

Balance, December 31, 2020 $ ( 27 ) $ 8 $ ( 1 ) $ ( 1 ) $ ( 21 )

Other comprehensive loss before reclassifications ( 7 ) ( 7 ) — — ( 14 )

Amounts reclassified from accumulated other comprehensive loss

Net current period other comprehensive income (loss) 13 ( 7 ) 1 — 7

Adjustments Net Deferred Gains on Cash Flow Hedges, net of tax Accumulated Other Comprehensive Loss

Balance, December 31, 2021 $ ( 14 ) $ — $ ( 14 )

7 unchanged sentences

Balance, December 31, 2023 ( 17 ) 3 ( 14 )

On April 1, 2021, the Company sold its 40 % ownership interest in Q 2 Solutions, its clinical trials central laboratory services joint venture, to IQVIA, its joint venture partner.

As a result of the transaction, during the year ended December 31, 2021, $ 20 million of cumulative translation losses were reclassified from accumulated other comprehensive loss to other income (expense), net.

See Note 7 for further details.

Other comprehensive (loss) income before reclassifications ( 76 ) 2 ( 74 )

Net current period other comprehensive (loss) income ( 76 ) 2 ( 74 )

Balance, December 31, 2024 $ ( 93 ) $ 5 $ ( 88 )

For the years ended December 31, 2024, 2023 and 2022, the gross deferred gains (losses) on cash flow hedges were reclassified from accumulated other comprehensive loss to interest expense, net.

6 unchanged sentences

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.

In February 2024, the Company announced that its Board of Directors authorized a 5.6 % increase in its quarterly cash dividend from $ 0.71 to $ 0.75 per share, or $ 3.00 per share annually, commencing with the dividend payable in April 2024.

In January 2025, the Company announced that its Board of Directors authorized a 6.7 % increase in its quarterly cash dividend from $ 0.75 to $ 0.80 per share, or $ 3.20 per share annually, commencing with the dividend payable in April 2025.

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 December 31, 2024, $ 0.9 billion remained available under the Company's share repurchase authorization.

2 unchanged sentences

For the year ended December 31, 2024, the Company repurchased 0.9 million shares of its common stock for $ 150 million.

For the year ended December 31, 2023, the Company repurchased 2.0 million shares of its common stock for $ 276 million.

For the year ended December 31, 2022, the Company repurchased 10.1 million shares of its common stock for $ 1.4 billion.

For the year ended December 31, 2021, the Company repurchased 16.0 million shares of its common stock for $ 2.2 billion, including shares repurchased under ASRs.

The repurchases during the year included an accrual of $ 23 million recorded in accounts payable and accrued expenses in the consolidated balance sheet for share repurchases not settled until after December 31, 2021.

In April 2021, the Company entered into ASRs with several financial institutions to repurchase its common stock as part of a share repurchase program.

Each of the ASRs was structured to permit the Company to purchase shares immediately with the final purchase price of those shares determined by the volume-weighted average price of the Company's common stock during the repurchase period, less a fixed discount, and was accounted for as two transactions:

(1) a treasury stock repurchase and (2) a forward contract.

During the year ended December 31, 2021, the Company paid $ 1.5 billion to the financial institutions and received 10.7 million shares of its common stock under the ASRs.

Shares Reissued from Treasury Stock

For each of the years ended December 31, 2023, 2022 and 2021, the Company reissued 2 million shares from treasury stock for shares issued under the Employee Stock Purchase Plan ("ESPP") and stock-based compensation program.

Treasury Stock Retirement

During the year ended December 31, 2021, the Company retired 55 million shares of treasury stock.

In accordance with the Company's policy, the amount paid to repurchase the shares in excess of par value was allocated between retained earnings and additional paid-in capital based on a pro-rata allocation of additional paid-in capital at the time of the share retirement.

For each of the years ended December 31, 2024, 2023 and 2022, the Company reissued 1 million, 2 million and 2 million shares, respectively, from treasury stock for shares issued under the Employee Stock Purchase Plan ("ESPP") and stock-based compensation program.

Redeemable Noncontrolling Interest

3 unchanged sentences

The Company records changes in the fair value of the noncontrolling interest immediately as they occur.

As of December 31, 2023 and 2022, the redeemable noncontrolling interest was $ 76 million and $ 77 million, respectively, and was presented at its fair value.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

1 unchanged sentence

(in millions unless otherwise indicated)

The following table summarizes the activity for the Company's redeemable noncontrolling interest during the years ended December 31, 2024 and 2023:

Redeemable Noncontrolling Interest

Balance, December 31, 2022

Distributions to noncontrolling interest partners ( 6 )

Balance, December 31, 2023

Distributions to noncontrolling interest partners ( 4 )

Contributions from noncontrolling interest partners 4

Balance, December 31, 2024

STOCK OWNERSHIP AND COMPENSATION PLANS

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Treasury yield curve in effect at the time of grant for bonds with maturities consistent with the expected holding period of the related award.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

The expected holding period was estimated using the historical stock option exercise behavior of employees.

7 unchanged sentences

Expected holding period, in years 4.9 4.9 4.9

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

The following summarizes the activity relative to stock option awards for 2023:

The following summarizes the activity related to stock option awards for 2024:

Average Exercise Price

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Options exercised ( 0.8 ) 92.76

Options forfeited and canceled ( 0.1 ) 129.67

Options outstanding, end of year 3.8 $ 112.76 4.9 $ 145

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Risk-free interest rate 4.4 % 4.4 % 1.7 %

The following summarizes the activity relative to stock awards, including restricted stock units and performance share units, for 2023, 2022 and 2021:

The following summarizes the activity related to stock awards, including restricted stock units and performance share units, for 2024, 2023 and 2022:

2024 2023 2022

47 unchanged sentences

As of December 31, 2024, the approximate total future purchase commitments are $ 693 million, of which $ 231 million are expected to be incurred in 2025, $ 345 million are expected to be incurred in 2026 through 2027 and the balance thereafter.

During the years ended December 31, 2024, 2023 and 2022, $ 263 million, $ 222 million and $ 83 million, respectively, were purchased under noncancelable commitments.

Billing and Collection Agreement

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The agreement includes an annual fee, which is subject to adjustment based on certain changes in the Company's requisition volume and the achievement of various performance metrics.

Contingent Lease Obligations

The Company remains subject to contingent obligations under certain real estate leases, including real estate leases that were entered into by certain predecessor companies of a subsidiary prior to the Company's acquisition of the subsidiary.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

1 unchanged sentence

(in millions unless otherwise indicated)

Contingent Lease Obligations

While over the course of many years, the title to certain properties and interest in the subject leases have been transferred to third parties and the subject leases have been amended several times by such third parties, the lessors have not formally released the subsidiary predecessor companies from their original obligations under the leases and therefore remain contingently liable in the event of default.

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In May 2021, the court denied the Company's motion to dismiss the complaint.

Discovery has been completed.

Plaintiffs' motion for class certification and the Company's motion for summary judgment are pending.

After discovery was completed, the Company's filed a motion for summary judgment, which was granted.

The matter is on appeal.

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”).

8 unchanged sentences

The bankruptcy proceeding has been dismissed.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

Numerous putative class action lawsuits were filed against the Company related to the AMCA Data Security Incident.

9 unchanged sentences

The Company is cooperating with the investigation.

ReproSource Fertility Diagnostics, Inc.

(“ReproSource”), a subsidiary of the Company, is subject to two putative class action lawsuits related to a data security incident that occurred in August 2021 in which plaintiffs allege that an unauthorized party accessed or acquired protected health information and personally identifiable information of ReproSource patients.

ReproSource Fertility Diagnostics, Inc.

is pending in the U.S.

District Court for the District of Massachusetts, and Trouville v.

ReproSource Fertility Diagnostics, Inc.

is pending in the U.S.

District Court for the Eastern District of California.

A third case filed in the U.S.

District Court for the District of Massachusetts, Gordon v.

ReproSource Fertility Diagnostics, Inc.

, was consolidated into the Bickham case.

The Bickham and Trouville complaints seek to represent a class of all individuals potentially impacted by the August 2021 data security incident, and generally allege that ReproSource, among other claims, failed to adequately safeguard patients’ private information.

On January 10, 2024, ReproSource agreed to settle the Bickham case on a class-wide basis.

The settlement is pending approval by the District Court.

If approved, ReproSource will receive a full release for all claims that the settlement class might possess arising out of the August 2021 data security incident.

A motion to dismiss, stay, or transfer the Trouville case to the U.S.

District Court for the District of Massachusetts remains pending.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

The Company is subject to a putative class action entitled Cole, et al.

v Quest Diagnostics Incorporated , which was filed in the U.

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 .

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 ("CIPA") and the California Confidentiality of Medical Information Act ("CMIA") .

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.

3 unchanged sentences

The Company's motion to transfer the case was granted.

The Company has refiled its motion to dismiss with the New Jersey District Court.

The Company refiled its motion to dismiss with the New Jersey District Court.

The motion to dismiss was granted without prejudice as to the CMIA claim and denied as to the CIPA claim.

Thereafter, the Company filed a motion for reconsideration as to the CIPA claim, which was granted.

As previously disclosed, in August 2011, the Company had received a subpoena from the U.S.

6 unchanged sentences

The Company moved to dismiss the complaint and the complaint was dismissed without prejudice in August 2022.

The relator subsequently filed a fourth amended complaint.

The Company has moved to dismiss the fourth amended complaint.

The relator subsequently filed a fourth amended complaint, which the Company has moved to dismiss.

On August 23, 2024, the district court dismissed the complaint with prejudice.

The matter is on appeal.

The Company also received subpoenas from the U.S.

2 unchanged sentences

The Company is cooperating with the investigation.

The Company has also received subpoenas from the New York Attorney General’s Office that seek information about, among other things, the ordering and billing of certain test panels to Medicaid programs in New York.

The Company is cooperating with the investigation.

Other Legal Matters

1 unchanged sentence

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.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

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.

3 unchanged sentences

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.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

Management cannot predict the outcome of such matters.

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however, the Company is essentially self-insured for a significant portion of these claims.

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.

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 general and professional liabilities claims 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 $ 169 million and $ 173 million as of December 31, 2024 and December 31, 2023, respectively.

Management believes that established reserves and present insurance coverage are sufficient to cover currently estimated exposures.

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

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 CODM, assesses performance and allocates resources across the organization.

The CODM uses the reported measure of segment profit (or loss) in assessing segment performance versus budget and when deciding how to allocate resources to segments.

The DIS business provides diagnostic information services to a broad range of customers within its primary customer channels - physicians, hospitals, and patients and consumers.

The DIS business accounted for greater than 95 % of net revenues in 2024, 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 offer solutions for insurers and offer solutions for healthcare providers and payers.

As of December 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.

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

1 unchanged sentence

(in millions unless otherwise indicated)

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 offer solutions for insurers and offer solutions for healthcare providers and payers.

As of December 31, 2024, 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.

On August 23, 2024, the Company acquired LifeLabs, which provides laboratory diagnostic information and digital health connectivity systems in Canada.

See Note 6 for further discussion.

The following table is a summary of segment information for the years ended December 31, 2024, 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.

Segment asset information is not presented since it is not received by the CODM at the operating segment level.

The CODM regularly reviews certain consolidated expenses, including employee compensation costs.

"Other segment items" principally consist of costs for obtaining, transporting and testing specimens, facility costs used for the delivery of the Company's services, costs associated with the Company's sales and marketing efforts, and costs related to billing operations.

Operating income (loss) of each segment represents net revenues less directly identifiable expenses.

General corporate activities included in the table below are comprised of general management and administrative corporate expenses, amortization and impairment of intangibles 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.

2023 2022 2021

Net revenues $ 9,614 $ 9,614

DIS business $ 8,976 $ 9,609 $ 10,494

All other operating segments 276 274 294

DS revenues 258

Total net revenues $ 9,872

Operating earnings (loss):

DIS business $ 1,547 $ 1,704 $ 2,646

All other operating segments 34 20 29

Other segment items ( 7,984 )

Segment operating income $ 1,630 $ 1,630

DS operating income 33

General corporate activities ( 317 )

Total operating income 1,346

Non-operating (expense) income, net ( 132 ) ( 193 ) 218

Non-operating expense, net ( 171 )

Income before income taxes and equity in earnings of equity method investees 1,175

4 unchanged sentences

Net income attributable to Quest Diagnostics $ 871

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED

(in millions unless otherwise indicated)

Net revenues $ 8,976 $ 8,976

DS revenues 276

Total net revenues $ 9,252

Other segment items ( 7,429 )

Segment operating income $ 1,547 $ 1,547

DS operating income 34

General corporate activities ( 319 )

Total operating income 1,262

Non-operating expense, net ( 132 )

Income before income taxes and equity in earnings of equity method investees 1,130

Income tax expense ( 248 )

Equity in earnings of equity method investees, net of taxes 26

Net income 908

Net income attributable to noncontrolling interests 54

Net income attributable to Quest Diagnostics $ 854

Net revenues $ 9,609 $ 9,609

DS revenues 274

Total net revenues $ 9,883

Other segment items ( 7,905 )

Segment operating income $ 1,704 $ 1,704

DS operating income 20

General corporate activities ( 296 )

Total operating income 1,428

Non-operating expense, net ( 193 )

Income before income taxes and equity in earnings of equity method investees 1,235

Income tax expense ( 264 )

Equity in earnings of equity method investees, net of taxes 44

Net income 1,015

Net income attributable to noncontrolling interests 69

Net income attributable to Quest Diagnostics $ 946

Depreciation and amortization expense for the years ended December 31, 2024, 2023 and 2022 were as follows:

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SUBSEQUENT EVENTS

During February 2024, the Company acquired the assets of Lenco Diagnostics Laboratories, Inc., an independent clinical diagnostic laboratory provider serving physicians in New York, in an all-cash transaction for $ 111 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 January 2025 and February 2025, the Company entered into various fixed-to-variable interest rate swap agreements to convert a portion of the Company's long-term debt into variable interest rate debt.

The aggregate notional amount of the interest rate swap agreements was $ 550 million.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures