Quest Diagnostics 2012 Annual Report Download - page 88

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F- 15
3. EARNINGS PER SHARE
The computation of basic and diluted earnings per common share is as follows (in thousands, except per share data):
2012 2011 2010
Amounts attributable to Quest Diagnostics’ stockholders:
Income from continuing operations $ 630,085 $ 459,009 $ 708,734
Income (loss) from discontinued operations, net of taxes (74,364) 11,558 12,160
Net income attributable to Quest Diagnostics’ common stockholders $ 555,721 $ 470,567 $ 720,894
Income from continuing operations $ 630,085 $ 459,009 $ 708,734
Less: Earnings allocated to participating securities 2,506 2,907 3,292
Earnings available to Quest Diagnostics’ common stockholders – basic and
diluted $ 627,579 $ 456,102 $ 705,442
Weighted average common shares outstanding – basic 158,572 158,672 175,684
Effect of dilutive securities:
Stock options and performance share units 1,493 1,500 1,636
Weighted average common shares outstanding – diluted 160,065 160,172 177,320
Earnings per share attributable to Quest Diagnostics’ common
stockholders – basic:
Income from continuing operations $ 3.96 $ 2.88 $ 4.01
Income (loss) from discontinued operations (0.47) 0.07 0.07
Net income $ 3.49 $ 2.95 $ 4.08
Earnings per share attributable to Quest Diagnostics’ common
stockholders – diluted:
Income from continuing operations $ 3.92 $ 2.85 $ 3.98
Income (loss) from discontinued operations (0.46) 0.07 0.07
Net income $ 3.46 $ 2.92 $ 4.05
The following securities were not included in the calculation of diluted earnings per share due to their antidilutive
effect (shares in thousands):
2012 2011 2010
Stock options and performance share units 1,793 2,259 2,886
4. INVIGORATE PROGRAM
During the first quarter of 2012, the Company committed to a course of action related to a multi-year program called
Invigorate which is designed to reduce its cost structure. The Invigorate program is intended to address continued
reimbursement pressures and labor and benefit cost increases, free up additional resources to invest in science, innovation and
other growth initiatives, and enable the Company to improve operating profitability and quality. In connection with this
program, the Company also launched a voluntary retirement program to certain eligible employees. The Invigorate program is
currently expected to be principally completed by the end of 2014.
In October 2012, the Company launched a major management restructuring aimed at driving operational excellence
and restoring growth. The key element of this organizational change is to eliminate the complexity associated with the
Company's prior structure, including reducing management layers, so that the Company can better focus on customers and
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(dollars in thousands unless otherwise indicated)