QUEST DIAGNOSTICS INC

Previous wording

For the six months ended June 30, 2025, we incurred $26 million of pre-tax charges in connection with restructuring and integration activities, including $12 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.

Current wording

For the nine months ended September 30, 2025, we incurred $37 million of pre-tax charges in connection with restructuring and integration activities, including $18 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

The OBBBA also makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation, domestic research cost expensing and the business interest expense limitation, among other tax changes. Many of the tax provisions of the OBBBA are designed to accelerate tax deductions, which could lead to lower cash tax payments. The new legislation has multiple effective dates, with certain provisions effective in 2025 and others in the future. While we continue to assess the impact of the tax provisions of the OBBBA on our consolidated financial statements, we currently believe that the tax provisions of the legislation are not expected to have a material impact on our statement of operations.

Current wording

The OBBBA also makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation, domestic research cost expensing and the business interest expense limitation, among other tax changes. Many of the tax provisions of the OBBBA are designed to accelerate tax deductions, which could lead to lower cash tax payments. The new legislation has multiple effective dates, with certain provisions effective in 2025 and others in the future. While we continue to assess the impact of the tax provisions of the OBBBA on our consolidated financial statements, we currently believe that the tax provisions of the legislation are not expected to have a material impact on our statement of operations. Our consolidated deferred income tax liabilities as of September 30, 2025 and December 31, 2024 were $378 million and $278 million, respectively. The increase was principally due to the domestic research cost expensing and bonus depreciation elements of the OBBBA.

Previous wording

•pre-tax charges of $30 million, recorded in other operating (income) expense, net, or $0.21 per diluted share, primarily representing a $24 million impairment charge on certain long-lived assets related to the potential exit of a business, and, to a lesser extent, losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and

Current wording

•pre-tax charges of $22 million, recorded in other operating expense, net, or $0.15 per diluted share, comprised of a $15 million charge to earnings related to legal matters, a $5 million impairment charge on certain long-lived assets related to the exit of a business and, to a lesser extent, losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and

Previous wording

•pre-tax charges of $7 million ($1 million recorded in cost of services and $6 million recorded in selling, general and administrative expenses), or $0.04 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; partially offset by

Current wording

•pre-tax charges of $11 million ($1 million recorded in cost of services and $10 million recorded in selling, general and administrative expenses), or $0.07 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; partially offset by

Previous wording

•pre-tax charges of $28 million, recorded in other operating (income) expense, net, or $0.19 per diluted share, primarily representing a $24 million impairment charge on certain long-lived assets related to the potential exit of a business, and, to a lesser extent, losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and

Current wording

•pre-tax charges of $52 million, recorded in other operating expense, net, or $0.36 per diluted share, primarily comprised of a $29 million impairment charge on certain long-lived assets related to the exit of a business, a $15 million charge to earnings related to legal matters and, to a lesser extent, losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions; and

Previous wording

•pre-tax charges of $26 million ($7 million recorded in cost of services and $19 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; partially offset by

Current wording

•pre-tax charges of $37 million ($8 million recorded in cost of services and $29 million recorded in selling, general and administrative expenses), or $0.24 per diluted share, primarily associated with workforce reductions and integration costs incurred in connection with further restructuring and integrating our business; partially offset by

Previous wording

•pre-tax gains of $54 million ($46 million recorded in other operating (income) expense, net and $8 million recorded in equity in earnings of equity method investees, net of taxes), or $0.36 per diluted share, from a $46 million payroll tax credit under the CARES Act associated with the retention of employees and, to a lesser extent, an $8 million non-recurring gain related to a lease;

Current wording

•pre-tax gains of $54 million ($46 million recorded in other operating expense, net and $8 million recorded in equity in earnings of equity method investees, net of taxes), or $0.36 per diluted share, from a $46 million payroll tax credit under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") associated with the retention of employees and, to a lesser extent, an $8 million non-recurring gain related to a lease;

Previous wording

•pre-tax charges of $7 million ($1 million recorded in selling, general and administrative expenses and $6 million recorded in other operating (income) 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

Current wording

•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

Previous wording

•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

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

•pre-tax charges of $4 million ($1 million recorded in selling, general and administrative expenses and $3 million recorded in other operating (income) 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

Current wording

•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

Previous wording

•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

Current wording

•$6 million of excess tax benefits associated with stock-based compensation arrangements, recorded in income tax expense, or $0.05 per diluted share.

Previous wording

Net revenues for the three months ended June 30, 2025 increased by 15.2% compared to the prior year period. For the three months ended June 30, 2025, organic growth was 5.2% compared to the prior year period.

Current wording

Net revenues for the three months ended September 30, 2025 increased by 13.1% compared to the prior year period. For the three months ended September 30, 2025, organic growth was 6.8% compared to the prior year period.

Previous wording

•The increase in DIS revenues compared to the prior year period was driven primarily by the impact of recent acquisitions and, to a lesser extent, organic growth. For the six months ended June 30, 2025, recent acquisitions contributed approximately 10.1% to DIS revenues.

Current wording

•The increase in DIS revenues compared to the prior year period was driven by both organic growth and the impact of recent acquisitions. For the three months ended September 30, 2025, recent acquisitions contributed approximately 6.5% to DIS revenues.

Previous wording

•DIS volume increased by 14.3% compared to the prior year period driven by the impact of recent acquisitions, which contributed approximately 13.7% to DIS volume, with organic volume up by 0.6%.

Current wording

•DIS volume increased by 12.5% compared to the prior year period driven by the impact of recent acquisitions, which contributed approximately 8.6% to DIS volume, with organic volume up 3.9%.

Previous wording

•Total revenue per requisition was down 0.4% versus the prior year period, driven primarily by the impact of the LifeLabs acquisition, which carries a lower revenue per requisition. On an organic basis, revenue per requisition was up 3.3% in the quarter versus the prior year period driven primarily by an increase in the number of tests per requisition and test mix.

Current wording

•Total revenue per requisition was up 0.8% versus the prior year period as an increase in organic revenue per requisition was substantially offset by the impact of the LifeLabs acquisition (which carries a lower revenue per requisition). On an organic basis, revenue per requisition was up 3.0% in the quarter versus the prior year period driven primarily by an increase in the number of tests per requisition and test mix.

Previous wording

DS revenues for the three months ended June 30, 2025 decreased by 3.1% compared to the prior year period principally due to lower revenues associated with our risk assessment services offered to insurers.

Current wording

DS revenues for the three months ended September 30, 2025 decreased by 1.0% compared to the prior year period principally due to lower revenues associated with our risk assessment services offered to insurers.

Previous wording

Net revenues for the six months ended June 30, 2025 increased by 13.7% compared to the prior year period. For the six months ended June 30, 2025, organic growth was 3.8% compared to the prior year period.

Current wording

Net revenues for the nine months ended September 30, 2025 increased by 13.5% compared to the prior year period. For the nine months ended September 30, 2025, organic growth was 4.8% compared to the prior year period.

Previous wording

•The increase in DIS revenues compared to the prior year period was driven primarily by the impact of recent acquisitions and, to a lesser extent, organic growth. For the three months ended June 30, 2025, recent acquisitions contributed approximately 10.3% to DIS revenues.

Current wording

•The increase in DIS revenues compared to the prior year period was driven primarily by the impact of recent acquisitions and, to a lesser extent, organic growth. For the nine months ended September 30, 2025, recent acquisitions contributed approximately 8.9% to DIS revenues.

Previous wording

•DIS volume increased by 16.3% compared to the prior year period driven by the impact of recent acquisitions, which contributed approximately 14.2% to DIS volume, with organic volume up by 2.1%.

Current wording

•DIS volume increased by 13.8% compared to the prior year period driven by the impact of recent acquisitions, which contributed approximately 12.0% to DIS volume, with organic volume up by 1.8%.

Previous wording

•Revenue per requisition was flat compared to the prior year period. The impact of LifeLabs, which has a lower revenue per requisition, was offset by an increase in the number of tests per requisition. On an organic basis, revenue per requisition increased 3.5% during the period.

Current wording

•Revenue per requisition was flat compared to the prior year period. An increase in the number of tests per requisition and test mix was offset by the impact of LifeLabs, which has a lower revenue per requisition. On an organic basis, revenue per requisition increased 3.3% during the period.

Previous wording

DS revenues for the six months ended June 30, 2025 decreased by 5.5% compared to the prior year period principally due to lower revenues associated with our risk assessment services offered to insurers.

Current wording

DS revenues for the nine months ended September 30, 2025 decreased by 4.0% compared to the prior year period principally due to lower revenues associated with our risk assessment services offered to insurers.

Previous wording

For the six months ended June 30, 2025, cost of services increased by $419 million compared to the prior year period. The increase was primarily driven by the impact of recent acquisitions, wage increases, and, to a lesser extent, higher supplies expense, partially offset by cost savings and productivity improvements from our Invigorate program.

Current wording

For the three months ended September 30, 2025, cost of services increased by $190 million compared to the prior year period. The increase was primarily driven by the impact of recent acquisitions, wage increases and higher employee health care costs and, to a lesser extent, higher supplies expense, partially offset by cost savings and productivity improvements from our Invigorate program.

Previous wording

For the three months ended June 30, 2025, cost of services increased by $225 million compared to the prior year period. The increase was primarily driven by the impact of recent acquisitions, wage increases, and, to a lesser extent, higher supplies expense, partially offset by cost savings and productivity improvements from our Invigorate program.

Current wording

For the nine months ended September 30, 2025, cost of services increased by $609 million compared to the prior year period. The increase was primarily driven by the impact of recent acquisitions, wage increases, and, to a lesser extent, higher supplies expense, partially offset by cost savings and productivity improvements from our Invigorate program.

Previous wording

For the six months ended June 30, 2025, SG&A increased by $106 million compared to the prior period. The increase was primarily driven by the impact of recent acquisitions, and, to a lesser extent, wage increases.

Current wording

For the three months ended September 30, 2025, SG&A increased by $53 million compared to the prior period. The increase was primarily driven by the impact of recent acquisitions, and, to a lesser extent, higher compensation costs.

Previous wording

For the three months ended June 30, 2025, SG&A increased by $70 million compared to the prior period. The increase was primarily driven by the impact of recent acquisitions, and, to a lesser extent, higher costs associated with changes in the fair value of our deferred compensation obligations.

Current wording

For the nine months ended September 30, 2025, SG&A increased by $159 million compared to the prior period. The increase was primarily driven by the impact of recent acquisitions, and, to a lesser extent, higher compensation costs and higher depreciation expense.

Previous wording

For the three andsix months ended June 30, 2025, amortization expense increased by $10 million and $20 million, respectively, compared to the prior year periods as a result of recent acquisitions.

Current wording

For the three andnine months ended September 30, 2025, amortization expense increased by $7 million and $27 million, respectively, compared to the prior year periods as a result of recent acquisitions.

Previous wording

Other operating (income) expense, net includes miscellaneous income and expense items and other charges related to operating activities.

Current wording

Other operating expense, net includes miscellaneous income and expense items and other charges related to operating activities.

Previous wording

For both the three and six months ended June 30, 2025, other operating (income) expense, net includes a $46 million gain from a payroll tax credit under the CARES Act associated with the retention of employees. Additionally, during the three and six months ended June 30, 2025, we recorded an impairment charge of $24 million on certain long-lived assets related to the potential exit of a business. Also, both periods include losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.

Current wording

For the nine months ended September 30, 2025, other operating expense, net includes a $46 million gain from a payroll tax credit under the CARES Act associated with the retention of employees. Additionally, during the nine months ended September 30, 2025, we also recorded an impairment charge of $29 million on certain long-lived assets related to the exit of a business, a $15 million charge to earnings related to legal matters and $8 million of losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.

Previous wording

For both the three and six months ended June 30, 2024, other operating (income) expense, net primarily represents losses associated with the increase in the fair value of the contingent consideration accrual associated with previous acquisitions.

Current wording

For both the three and nine months ended September 30, 2024, 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, 2025, interest expense, net increased by $23 million and $47 million, respectively, compared to the prior year periods primarily due to the issuance during August 2024 of $1.85 billion of senior notes.

Current wording

For the three and nine months ended September 30, 2025, interest expense, net increased by $17 million and $64 million, respectively, compared to the prior year periods primarily due to the issuance during August 2024 of $1.85 billion of senior notes.

Previous wording

For the three and six months ended June 30, 2025, other income, net included $11 million and $9 million, respectively, of gains associated with investments in our deferred compensation plans.

Current wording

For the three and nine months ended September 30, 2025, other income, net included $7 million and $16 million, respectively, of gains associated with investments in our deferred compensation plans.

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, 2024, other income, 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

Income tax expense for the three months ended June 30, 2025 and 2024 was $97 million and $74 million, respectively.

Current wording

Income tax expense for the three months ended September 30, 2025 and 2024 was $77 million and $65 million, respectively.

Previous wording

The effective income tax rate for the six months ended June 30, 2025 and 2024 was 23.6% and 24.2%, respectively. The effective income tax rate benefited from $12 million and $3 million of excess tax benefits associated with stock-based compensation arrangements for the six months ended June 30, 2025 and 2024, respectively.

Current wording

The effective income tax rate for the three months ended September 30, 2025 and 2024 was 23.6% and 21.9%, respectively. The effective income tax rates benefited from $3 million of excess tax benefits associated with stock-based compensation arrangements for each of the three months ended September 30, 2025 and 2024.

Previous wording

Income tax expense for the six months ended June 30, 2025 and 2024 was $156 million and $140 million, respectively.

Current wording

Income tax expense for the nine months ended September 30, 2025 and 2024 was $233 million and $205 million, respectively.

Previous wording

The effective income tax rate for the three months ended June 30, 2025 and 2024 was 25.1% and 23.4%, respectively. The effective income tax rate benefited from $3 million and $1 million of excess tax benefits associated with stock-based compensation arrangements for the three months ended June 30, 2025 and 2024, respectively.

Current wording

The effective income tax rate for the nine months ended September 30, 2025 and 2024 was 23.6% and 23.4%, respectively. The effective income tax rate benefited from $15 million and $6 million of excess tax benefits associated with stock-based compensation arrangements for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Equity in earnings of equity method investees, net of taxes, increased by $9 million for the three months ended June 30, 2025, 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.

Current wording

Equity in earnings of equity method investees, net of taxes, increased by $2 million for the three months ended September 30, 2025, compared to the prior year period.

Previous wording

Equity in earnings of equity method investees, net of taxes, increased by $19 million for the six months ended June 30, 2025, 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 and the six months ended June 30, 2025 including an $8 million non-recurring gain related to a lease.

Current wording

Equity in earnings of equity method investees, net of taxes, increased by $21 million for the nine months ended September 30, 2025, compared to the prior year period, primarily due to the nine months ended September 30, 2024 including $11 million of net losses associated with changes in the carrying value of our strategic investments and the nine months ended September 30, 2025 including an $8 million non-recurring gain related to a lease.

Previous wording

As of June 30, 2025 and December 31, 2024, the fair value of our debt was estimated at approximately $5.6 billion and $6.1 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, 2025 and December 31, 2024, the estimated fair value was less than the carrying value of the debt by $26 million and $112 million, respectively. A hypothetical 10% increase in interest rates (representing 47 basis points and 35 basis points as of June 30, 2025 and December 31, 2024, respectively) would potentially reduce the estimated fair value of our debt by approximately $149 million and $184 million, respectively, as of June 30, 2025 and December 31, 2024.

Current wording

As of September 30, 2025 and December 31, 2024, the fair value of our debt was estimated at approximately $5.7 billion and $6.1 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, 2025 and December 31, 2024, the estimated fair value was more than (less than) the carrying value of the debt by $56 million and $(112) million, respectively. A hypothetical 10% increase in interest rates (representing 45 basis points and 35 basis points as of September 30, 2025 and December 31, 2024, respectively) would potentially reduce the estimated fair value of our debt by approximately $141 million and $184 million, respectively, as of September 30, 2025 and December 31, 2024.

Previous wording

The notional amount of fixed-to-variable interest rate swaps outstanding as of June 30, 2025 and December 31, 2024 was $1.8 billion and $700 million, respectively. The aggregate fair value of the fixed-to-variable interest rate swaps was $17 million and $(34) million, in an asset (liability) position, as of June 30, 2025 and December 31, 2024, respectively.

Current wording

The notional amount of fixed-to-variable interest rate swaps outstanding as of September 30, 2025 and December 31, 2024 was $1.8 billion and $700 million, respectively. The aggregate fair value of the fixed-to-variable interest rate swaps was $18 million and $(34) million, in an asset (liability) position, as of September 30, 2025 and December 31, 2024, respectively.