QUEST DIAGNOSTICS INC
For the period ended Sep 30, 2024. Filed Oct 23, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 23, 2024
DGX$255.63+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-24.
0001022079-24-000156
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-23.
0001022079-24-000190
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 138 previous paragraphs and 146 current paragraphs.
62 unchanged; 47 reworded; 36 added; 24 removed; 5 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (36)
Current report
Third Quarter Highlights
Current report
Acquisition of LifeLabs Inc. ("LifeLabs")
Current report
On August 23, 2024, we completed the acquisition of 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.
Current report
Acquisition of select assets of the outreach laboratory services business of Allina Health ("Allina")
Current report
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.
Current report
Acquisition of the laboratory business of three physician groups in New York
Current report
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.
Current report
August 2024 Senior Notes Offering
Current report
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.
Current report
For further details regarding our debt, see Note 7 to the interim unaudited consolidated financial statements.
Current report
Results for the three months ended September 30, 2024 were affected by certain items that on a net basis decreased diluted earnings per share by $0.31 as follows:
Current report
•pre-tax amortization expense of $32 million recorded in amortization of intangible assets, or $0.21 per diluted share;
Current report
•pre-tax net charges of $18 million ($5 million recorded in cost of services and $15 million recorded in selling, general and administrative expenses, partially offset by a $2 million gain recorded in other operating expense, net), or $0.13 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Current report
•pre-tax charges of $5 million ($1 million recorded in selling, general and administrative expenses and $4 million recorded in other operating expense, net), or $0.04 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and
Current report
•a pre-tax gain of $8 million, recorded in other income (expense), net, or $0.06 per diluted share, representing a non-recurring gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition, and
Current report
Results for the nine months ended September 30, 2024 were affected by certain items that on a net basis decreased diluted earnings per share by $0.96 as follows:
Current report
•pre-tax amortization expense of $90 million recorded in amortization of intangible assets, or $0.59 per diluted share;
Current report
•pre-tax net charges of $45 million ($19 million recorded in cost of services and $28 million recorded in selling, general and administrative expenses, partially offset by a $2 million gain recorded in other operating expense, net), or $0.31 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Current report
•pre-tax charges of $12 million ($2 million recorded in selling, general and administrative expenses and $10 million recorded in other operating expense, net), or $0.10 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and
Current report
•pre-tax charges of $11 million recorded in equity in earnings of equity method investees, net of taxes, or $0.07 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; partially offset by
Current report
•a pre-tax gain of $8 million, recorded in other income (expense), net, or $0.06 per diluted share, representing a non-recurring gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition, and
Current report
•$6 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.05 per diluted share.
Current report
Results for the three months ended September 30, 2023 were affected by certain items that on a net basis decreased diluted earnings per share by $0.26 as follows:
Current report
•pre-tax charges of $5 million ($1 million in selling, general and administrative expenses and $4 million in other operating expense, net), or $0.04 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; partially offset by
Current report
Results for the nine months ended September 30, 2023 were affected by certain items that on a net basis decreased diluted earnings per share by $0.77 as follows:
Current report
•pre-tax amortization expense of $81 million recorded in amortization of intangible assets or $0.53 per diluted share;
Current report
•pre-tax charges of $32 million ($12 million in cost of services and $20 million in selling, general and administrative expenses), or $0.22 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Current report
•excess tax benefits associated with stock-based compensation arrangements of $9 million recorded in income tax expense, or $0.08 per diluted share.
Current report
Net revenues for the three months ended September 30, 2024 increased by 8.5% compared to the prior year period.
Current report
DIS revenues for the three months ended September 30, 2024 increased by 9.0% compared to the prior year period.
Current report
Net revenues for the nine months ended September 30, 2024 increased by 4.1% compared to the prior year period.
Current report
DIS revenues for the nine months ended September 30, 2024 increased by 4.5% compared to the prior year period.
Current report
For the nine months ended September 30, 2024:
Current report
For the three months ended September 30, 2024, SG&A increased by$68 million compared to the prior period. The increasewas primarily driven by the impact of recent acquisitions, lower performance-based compensation in the prior year period, and higher costs associated with changes in the value of our deferred compensation obligations.
Current report
For the nine months ended September 30, 2024, SG&A increased by $69 million compared to the prior period. The increasewas primarily driven by the impact of recent acquisitions, lower performance-based compensation in the prior year period, higher costs associated with changes in the value of our deferred compensation obligations and higher depreciation expense.
Current report
Other Income (Expense), Net
Removed paragraphs (24)
Previous report
Second Quarter Highlights
Previous report
Results for the three months ended June 30, 2024 were affected by certain items that on a net basis decreased diluted earnings per share by $0.32 as follows:
Previous report
•pre-tax amortization expense of $29 million recorded in amortization of intangible assets, or $0.19 per diluted share;
Previous report
•pre-tax charges of $10 million ($1 million recorded in cost of services and $9 million recorded in selling, general and administrative expenses), or $0.06 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Previous report
•pre-tax charges of $9 million recorded in equity in earnings of equity method investees, net of taxes, or $0.05 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; and
Previous report
•pre-tax charges of $4 million ($1 million recorded in selling, general and administrative expenses and $3 million recorded in other operating expense, net), or $0.03 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; partially offset by
Previous report
Results for the six months ended June 30, 2024 were affected by certain items that on a net basis decreased diluted earnings per share by $0.64 as follows:
Previous report
•pre-tax amortization expense of $58 million recorded in amortization of intangible assets, or $0.39 per diluted share;
Previous report
•pre-tax charges of $27 million ($14 million recorded in cost of services and $13 million recorded in selling, general and administrative expenses), or $0.17 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Previous report
•pre-tax charges of $7 million ($1 million recorded in selling, general and administrative expenses and $6 million recorded in other operating expense, net), or $0.06 per diluted share, primarily representing a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and
Previous report
•pre-tax charges of $9 million recorded in equity in earnings of equity method investees, net of taxes, or $0.05 per diluted share, representing net losses associated with changes in the carrying value of our strategic investments; partially offset by
Previous report
Results for the three months ended June 30, 2023 were affected by certain items that on a net basis decreased diluted earnings per share by $0.25 as follows:
Previous report
Results for the six months ended June 30, 2023 were affected by certain items that on a net basis decreased diluted earnings per share by $0.51 as follows:
Previous report
•pre-tax amortization expense of $54 million recorded in amortization of intangible assets, or $0.35 per diluted share;
Previous report
•pre-tax charges of $26 million ($10 million recorded in cost of services and $16 million recorded in selling, general and administrative expenses), or $0.17 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business;
Previous report
•excess tax benefits associated with stock-based compensation arrangements of $7 million recorded in income tax expense, or $0.07 per diluted share.
Previous report
Net revenues for the three months ended June 30, 2024 increased by 2.5% compared to the prior year period.
Previous report
DIS revenues for the three months ended June 30, 2024 increased by 2.8% compared to the prior year period.
Previous report
•Revenue per requisition in the base business increased by 2.4% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix, partially offset by lower revenues associated with certain value-based arrangements.
Previous report
Net revenues for the six months ended June 30, 2024 increased by 2.0% compared to the prior year period.
Previous report
DIS revenues for the six months ended June 30, 2024 increased by 2.3% compared to the prior year period.
Previous report
For the six months ended June 30, 2024:
Previous report
SG&A for the three months ended June 30, 2024 was consistent with the prior year period. The impact of recent acquisitions was offset by lower benefit costs.
Previous report
Other Income, Net
Reworded paragraphs (47)
Previous wording
For the six months ended June 30, 2024, we incurred $27 million of pre-tax charges in connection with restructuring and integration activities, including $14 million of employee separation costs, with the remainder primarily consisting of integration costs. Most of the charges will result in cash expenditures. Additional restructuring and integration charges may be incurred in future periods, including as we identify additional opportunities to achieve further savings and productivity improvements.
Current wording
For the nine months ended September 30, 2024, we incurred $45 million of pre-tax charges in connection with restructuring and integration activities, including $21 million of employee separation costs, with the remainder including integration costs. Most of the charges will result in cash expenditures. Additional restructuring and integration charges may be incurred in future periods, including as we identify additional opportunities to achieve further savings and productivity improvements.
Previous wording
•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
Current wording
•pre-tax charges of $2 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
Previous wording
•excess tax benefits associated with stock-based compensation arrangements of $3 million recorded in income tax expense, or $0.03 per diluted share.
Current wording
•$3 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.03 per diluted share.
Previous wording
•pre-tax amortization expense of $28 million recorded in amortization of intangible assets, or $0.18 per diluted share;
Current wording
•pre-tax amortization expense of $27 million recorded in amortization of intangible assets or $0.18 per diluted share;
Previous wording
•pre-tax charges of $7 million recorded in selling, general and administrative expenses, or $0.05 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; and
Current wording
•pre-tax charges of $6 million ($2 million in cost of services and $4 million in selling, general and administrative expenses), or $0.05 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; and
Previous wording
•excess tax benefits associated with stock-based compensation arrangements of $1 million recorded in income tax expense, or $0.01 per diluted share.
Current wording
•excess tax benefits associated with stock-based compensation arrangements of $2 million recorded in income tax expense, or $0.01 per diluted share.
Previous wording
•pre-tax charges of $6 million recorded in selling, general and administrative expenses, or $0.04 per diluted share, primarily representing the impairment of a corporate facility that was held for sale; partially offset by
Current wording
•pre-tax charges of $11 million ($7 million in selling, general and administrative expenses and $4 million in other operating expense, net), or $0.08 per diluted share, primarily representing the impairment of a corporate facility that was sold and a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions, and
Previous wording
•The increase in DIS revenues compared to the prior year period was driven primarily by growth in the base business (which excludes COVID-19 testing) and, to a lesser extent, the impact of recent acquisitions, largely offset by a decrease in COVID-19 testing. For the six months ended June 30, 2024, recent acquisitions contributed approximately 0.8% to DIS revenues.
Current wording
•The increase in DIS revenues compared to the prior year period was driven primarily by organic growth and the impact of recent acquisitions. For the three months ended September 30, 2024, recent acquisitions contributed approximately 4.4% to DIS revenues.
Previous wording
•DIS volume increased by 1.4% compared to the prior year period driven primarily by growth in the base business and the impact of recent acquisitions, which contributed approximately 0.5% to DIS volume, partially offset by a decrease in COVID-19 testing.
Current wording
•DIS volume increased by 5.5% compared to the prior year period primarily driven by the impact of recent acquisitions, which contributed approximately 5.0% to DIS volume.
Previous wording
•Revenue per requisition increased by 1.6% compared to the prior year period 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 lower revenues associated with certain value-based arrangements.
Current wording
•Revenue per requisition increased by 3.3% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix.
Previous wording
DS revenues for the three months ended June 30, 2024 decreased by 8.8% compared to the prior year period due to lower revenues associated with both our risk assessment services offered to insurers and our healthcare information technology businesses.
Current wording
DS revenues for the three months ended September 30, 2024 decreased by 7.9% compared to the prior year period due to lower revenues associated with both our risk assessment services offered to insurers and our healthcare information technology businesses.
Previous wording
•The increase in DIS revenues compared to the prior year period was driven primarily by 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 three months ended June 30, 2024, recent acquisitions contributed approximately 0.7% to DIS revenues.
Current wording
•The increase in DIS revenues compared to the prior year period 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 nine months ended September 30, 2024, recent acquisitions contributed approximately 2.0% to DIS revenues.
Previous wording
•DIS volume increased by 1.1% compared to the prior year period driven primarily by growth in the base business and the impact of recent acquisitions, which contributed approximately 0.4% to DIS volume, partially offset by a decrease in COVID-19 testing.
Current wording
•DIS volume increased by 2.7% compared to the prior year period primarily driven by the impact of recent acquisitions, which contributed approximately 2.0% to DIS volume, and growth in the base business, partially offset by a decrease in COVID-19 testing.
Previous wording
•Revenue per requisition increased by 0.9% compared to the prior year period 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.
Current wording
•Revenue per requisition increased by 1.7% compared to the prior year period 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.
Previous wording
•DIS revenues in the base business (including the impact of recent acquisitions) increased by 4.2% compared to the prior year period.
Current wording
•DIS revenues in the base business (including the impact of recent acquisitions) increased by 6.6% compared to the prior year period.
Previous wording
•Testing volume in the base business (including the impact of recent acquisitions) was up 1.7% compared to the prior year period.
Current wording
•Testing volume in the base business (including the impact of recent acquisitions) was up 3.6% compared to the prior year period.
Previous wording
•Revenue per requisition in the base business increased by 2.5% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix.
Current wording
•Revenue per requisition in the base business increased by 2.9% compared to the prior year period principally due to an increase in the number of tests per requisition and favorable test mix.
Previous wording
DS revenues for the six months ended June 30, 2024 decreased by 6.9% compared to the prior year period due to lower revenues associated with both our risk assessment services offered to insurers and our healthcare information technology businesses.
Current wording
DS revenues for the nine months ended September 30, 2024 decreased by 7.2% compared to the prior year period due to lower revenues associated with both our risk assessment services offered to insurers and our healthcare information technology businesses.
Previous wording
For the three months ended June 30, 2024, cost of services increased by $47 million compared to the prior year period. The increase was primarily driven by wage increases, higher supplies expenses and, to a lesser extent, the impact of recent acquisitions, partially offset by cost savings and productivity improvements from our Invigorate program.
Current wording
For the three months ended September 30, 2024, cost of services increased by $136 million comp ared to the prior year period. The increase was primarily 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.
Previous wording
For the six months ended June 30, 2024, cost of services increased by $82 million compared to the prior year period. The increase was primarily driven by higher supplies expenses, wage increases, higher benefit costs and the impact of recent acquisitions, partially offset by cost savings and productivity improvements from our Invigorate program.
Current wording
For the nine months ended September 30, 2024, cost of services increased by $218 million compared to the prior year period. The increase was primarily 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.
Previous wording
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, net. For further details regarding our deferred compensation plans, see Note 18 to the audited consolidated financial statements included in our 2023 Annual Report on Form 10-K.
Current wording
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. For further details regarding our deferred compensation plans, see Note 18 to the audited consolidated financial statements included in our 2023 Annual Report on Form 10-K.
Previous wording
For the three andsix months ended June 30, 2024, amortization expense increased by $1 million and $4 million, respectively, compared to the prior year periods, as a result of recent acquisitions.
Current wording
For the three andnine months ended September 30, 2024, amortization expense increased by $5 million and $9 million, respectively, compared to the prior year periods, as a result of recent acquisitions.
Previous wording
For both thethree andsix months ended June 30, 2024, other operating expense, net primarily represents a loss associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.
Current wording
For thethree andnine months ended September 30, 2024 and 2023, other operating expense, net primarily represents losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.
Previous wording
For the three and six months ended June 30, 2024, interest expense, net increased by $7 million and $15 million, respectively, compared to the prior year periods primarily due to the issuance, during November 2023, of $750 million aggregate principal amount of 6.40% senior notes due 2033, partially offset by the repayment at maturity of our $300 million aggregate principal amount of 4.25% senior notes on April 1, 2024, and lower borrowings under our secured receivables credit facility.
Current wording
For the three and nine months ended September 30, 2024, interest expense, net increased by $9 million and $24 million, respectively, compared to the prior year periods primarily due to the issuance during November 2023 of $750 million aggregate principal amount of 6.40% senior notes due 2033 and the issuance during August 2024 of $1.85 billion of Senior Notes (see "Third Quarter Highlights" above for further details), partially offset by increased interest income (principally due to higher cash on hand) and lower borrowings under our secured receivables credit facility.
Previous wording
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.
Current wording
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.
Previous wording
For the three and six months ended June 30, 2023, other income, net included $6 million and $13 million, respectively, of gains associated with investments in our deferred compensation plans.
Current wording
For the three and nine months ended September 30, 2024, other income (expense), net included $6 million and $18 million, respectively, of gains associated with investments in our deferred compensation plans. Additionally, both periods included an $8 million gain associated with a foreign exchange forward contract utilized in conjunction with an acquisition.
Previous wording
For the three and six months ended June 30, 2024, other income, net included $3 million and $12 million, respectively, of gains associated with investments in our deferred compensation plans.
Current wording
For the three and nine months ended September 30, 2023, other income (expense), net included $3 million of losses and $9 million of gains, respectively, associated with investments in our deferred compensation plans.
Previous wording
Income tax expense for the three months ended June 30, 2024 and 2023 was $74 million and $75 million, respectively.
Current wording
Income tax expense for the three months ended September 30, 2024 and 2023 was $65 million and $68 million, respectively.
Previous wording
The effective income tax rate for the three months ended June 30, 2024 and 2023 was 23.4% and 23.5%, respectively. The effective income tax rate benefited from $1 million and $2 million of excess tax benefits associated with stock-based compensation arrangements for the three months ended June 30, 2024 and 2023, respectively.
Current wording
The effective income tax rate for the three months ended September 30, 2024 and 2023 was 21.9% and 22.8%, respectively. The effective income tax rate benefited from $3 million and $2 million of excess tax benefits associated with stock-based compensation arrangements for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
Income tax expense for the six months ended June 30, 2024 and 2023 was $140 million for both periods.
Current wording
Income tax expense for the nine months ended September 30, 2024 and 2023 was $205 million and $208 million, respectively.
Previous wording
The effective income tax rate for the six months ended June 30, 2024 and 2023 was 24.2% and 23.5%, respectively. The effective income tax rate benefited from $3 million and $7 million of excess tax benefits associated with stock-based compensation arrangements for the six months ended June 30, 2024 and 2023, respectively.
Current wording
The effective income tax rate for the nine months ended September 30, 2024 and 2023 was 23.4% and 23.3%, respectively. The effective income tax rate benefited from $6 million and $9 million of excess tax benefits associated with stock-based compensation arrangements for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
SG&A for the six months ended June 30, 2024 was principally consistent with the prior year period. Increased depreciation expense and the impact of recent acquisitions was principally offset by lower marketing expenses and decreased benefit costs.
Current wording
Equity in earnings of equity method investees, net of taxes, during the three months ended September 30, 2024 was principally consistent with the prior year period.
Previous wording
Equity in earnings of equity method investees, net of taxes, decreased by $4 million for the six months ended June 30, 2024 compared to the prior year period primarily due to the six months ended June 30, 2024 including $9 million of net 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.
Current wording
Equity in earnings of equity method investees, net of taxes, decreased by $4 million for the nine months ended September 30, 2024 compared to the prior year period primarily due to the nine months ended September 30, 2024 including $11 million of 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.
Previous wording
As of June 30, 2024 and December 31, 2023, the fair value of our debt was estimated at approximately $4.3 billion and $4.6 billion, respectively, principally using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments. As of June 30, 2024 and December 31, 2023, the estimated fair value was less than the carrying value of the debt by $147 million and $127 million, respectively. A hypothetical 10% increase in interest rates (representing 51 basis points and 50 basis points as of June 30, 2024 and December 31, 2023, respectively) would potentially reduce the estimated fair value of our debt by approximately $136 million and $139 million, respectively, as of June 30, 2024 and December 31, 2023.
Current wording
As of September 30, 2024 and December 31, 2023, the fair value of our debt was estimated at approximately $6.3 billion and $4.6 billion, respectively, principally using quoted prices in active markets and yields for the same or similar types of borrowings, taking into account the underlying terms of the debt instruments. As of September 30, 2024 and December 31, 2023, the estimated fair value was more than (less than) the carrying value of the debt by $32 million and $(127) million, respectively. A hypothetical 10% increase in interest rates (representing 32 basis points and 50 basis points as of September 30, 2024 and December 31, 2023, respectively) would potentially reduce the estimated fair value of our debt by approximately $178 million and $139 million, respectively, as of September 30, 2024 and December 31, 2023.
Previous wording
We regularly evaluate equity investments that do not have readily determinable fair values to determine if there are any indicators that the investments are impaired. The carrying value of our equity investments that do not have readily determinable fair values was $36 million as of June 30, 2024. In conjunction with the preparation of our June 30, 2024 financial statements, we considered whether the carrying values of our investments were impaired and concluded that no such impairment existed.
Current wording
We regularly evaluate equity investments that do not have readily determinable fair values to determine if there are any indicators that the investments are impaired. The carrying value of our equity investments that do not have readily determinable fair values was $37 million as of September 30, 2024. In conjunction with the preparation of our September 30, 2024 financial statements, we considered whether the carrying values of our investments were impaired and concluded that no such impairment existed.
Previous wording
Cash and cash equivalents consist of cash and highly-liquid short-term investments with original maturities, at the time of acquisition, of three months or less. Cash and cash equivalents as of June 30, 2024 totaled $271 million, compared to $686 million as of December 31, 2023.
Current wording
Cash and cash equivalents consist of cash and highly-liquid short-term investments with original maturities, at the time of acquisition, of three months or less. Cash and cash equivalents as of September 30, 2024 totaled $764 million, compared to $686 million as of December 31, 2023.
Previous wording
As of June 30, 2024, approximately 14% of our $271 million of consolidated cash and cash equivalents were held outside of the United States.
Current wording
As of September 30, 2024, approximately 13% of our $764 million of consolidated cash and cash equivalents were held outside of the United States.
Previous wording
Net cash provided by operating activities for the six months ended June 30, 2024 and 2023 was $514 million and $538 million, respectively. The $24 million decrease in net cash provided by operating activities for the six months ended June 30, 2024, compared to the prior year period, was primarily a result of the timing of cash collections, partially offset by the timing of cash payments.
Current wording
Net cash provided by operating activities for the nine months ended September 30, 2024 and 2023 was $870 million and $745 million, respectively. The $125 million increase in net cash provided by operating activities for the nine months ended September 30, 2024, compared to the prior year period, was primarily a result of lower income tax payments and lower performance-based compensation payments.
Previous wording
Days sales outstanding, a measure of billing and collection efficiency, was 50 days as of June 30, 2024, 50 days as of of December 31, 2023 and 47 days as of June 30, 2023.
Current wording
Days sales outstanding, a measure of billing and collection efficiency, was 49 days as of September 30, 2024, 50 days as of of December 31, 2023 and 50 days as of September 30, 2023.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2024 and 2023 was $413 million and $840 million, respectively. This $427 million decrease in net cash used in investing activities for the six months ended June 30, 2024, compared to the prior year period, was primarily a result of decreased cash used for business acquisitions and, to a lesser extent, lower capital expenditures.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2024 and 2023 was $2.0 billion and $947 million, respectively. This $1.1 billion increase in net cash used in investing activities for the nine months ended September 30, 2024, compared to the prior year period, was primarily a result of increased cash used for business acquisitions (see "Third Quarter Highlights" above for further details), partially offset by decreased capital expenditures.
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Current report — wording carried from elsewhere
•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; partially offset by
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
•excess tax benefits associated with stock-based compensation arrangements of $2 million recorded in income tax expense, or $0.02 per diluted share.
Previous report — wording carried elsewhere
•pre-tax charges of $6 million recorded in selling, general and administrative expenses, or $0.04 per diluted share, primarily representing the impairment of a corporate facility that was held for sale, and
Previous report — wording carried elsewhere
•DIS revenues in the base business (including the impact of recent acquisitions) increased by 5.1% compared to the prior year period.
Previous report — wording carried elsewhere
•Testing volume in the base business (including the impact of recent acquisitions) was up 2.5% compared to the prior year period.
Previous report — wording carried elsewhere
Equity in earnings of equity method investees, net of taxes, decreased by $7 million for the three months ended June 30, 2024 compared to the prior year period primarily due to the three months ended June 30, 2024 including $9 million of net 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.