Quest Diagnostics 2013 Annual Report Download - page 88

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F- 16
The Company also launched a management restructuring initiative aimed at driving operational excellence and
restoring growth in 2013 as part of the Invigorate program. 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 speed decision-making. The Company has essentially completed the elimination of at least three
layers from the organization as of December 31, 2013.
The following table provides a summary of the Company's pre-tax restructuring charges associated with its Invigorate
program and other restructuring activities for the years ended December 31, 2013 and December 31, 2012:
2013 2012
Employee separation costs $ 69 $ 57
Facility-related costs 61
Asset impairment charges —1
Accelerated vesting of stock-based compensation 1 2
Total restructuring charges $ 76 $ 61
Total restructuring charges incurred for the year ended December 31, 2013 included $29 million of employee
separation costs associated with various workforce reduction initiatives aimed at centralizing certain support functions, $20
million associated with the Company's management layer reduction initiative, $16 million associated with the outsourcing of
certain aspects of the Company's support functions and $4 million associated with the Company's voluntary retirement
program.
Of the total $76 million in restructuring charges incurred during the year ended December 31, 2013, $27 million and
$49 million were recorded in cost of services and selling, general and administrative expenses, respectively.
Total restructuring charges incurred during the year ended December 31, 2012 included $45 million of employee
separation costs incurred under the Company's voluntary retirement program and $12 million of employee separation costs
associated with various workforce reduction initiatives.
Of the total $61 million in restructuring charges incurred during the year ended December 31, 2012, $37 million and
$24 million were recorded in cost of services and selling, general and administrative expenses, respectively.
Charges for both periods presented were primarily recorded in the Company's DIS business.
The following table summarizes the activity of the restructuring liability as of December 31, 2013, which is included
in accrued expenses in Note 12:
Employee
Separation
Costs
Facility-
Related
Costs Total
Balance, December 31, 2012 $ 40$ —$ 40
Income statement expense 69 6 75
Cash payments (81)(1)(82)
Other / adjustments 3 — 3
Balance, December 31, 2013 $ 31$ 5$ 36
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)