Quest Diagnostics 2015 Annual Report Download - page 46

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42
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
See Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 8. Financial Statements and Supplementary Data
See Item 15(a)1 and Item 15(a)2.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Conclusion Regarding Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and our
Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined under Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based upon that evaluation, our Chief
Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of
the end of the period covered by this annual report.
Management's Report on Internal Control Over Financial Reporting
Changes in Internal Control
During the fourth quarter of 2015, there were no changes in our internal control over financial reporting (as defined in
Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
Item 9B. Other Information
On November 5, 2014, the Company announced that it was developing a new multi-year program designed to drive
operational excellence and reduce the Company’s cost structure by an additional $600 million in run rate savings as it exits
2017. The Company identified key opportunities to change how it operates, in order to meet this goal. These opportunities
include: standardizing the Company's processes, information technology systems, equipment and data; enhancing electronic
enabling services; and enhancing reimbursement for work the Company performs.
On January 26, 2015, the Company adopted a course of action related to this multi-year program. The Company has
developed a high-level estimate of the pre-tax charges expected to be incurred in connection with the course of action for the
program: $300 million.
During 2015, the cumulative charges recorded in connection with the 2015 course of action were $89 million. On February
26, 2016, the Company developed high-level estimates of the pre-tax charges expected to be incurred in connection with the course
of action for 2016: $80 million to $100 million, consisting of up to $10 million of employee separation costs and $80 million to
$90 million of systems conversion and integration costs. Principally all of the total estimated pre-tax charges expected to be
See page 48.
See page 52.
See page 71.
QUEST DIAGNOSTICS 2015 ANNUAL REPORT ON FORM 10-K