Quest Diagnostics 2015 Annual Report Download - page 64

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60
effect on current and prior periods of a change in the estimated forfeiture rate is recognized as compensation cost in earnings in
the period of the change.
The terms of our performance share unit awards allow the recipients to earn a variable number of shares based on the
achievement of the performance goals specified in the awards. Stock-based compensation expense associated with
performance share units is recognized based on management's best estimates of the achievement of the performance goals
specified in such awards and the resulting number of shares that will be earned. If the actual number of performance share
units earned is different from our estimates, stock-based compensation could be significantly different from what we have
recorded in the current period. The cumulative effect on current and prior periods of a change in the estimated number of
performance share units expected to be earned is recognized as compensation cost in earnings in the period of the change.
While the assumptions used to calculate and account for stock-based compensation awards represent management's best
estimates, these estimates involve inherent uncertainties and the application of management's judgment. As a result, if changes
are made to our assumptions and estimates, our stock-based compensation expense could vary significantly from period to
period. In addition, the number of awards made under our equity compensation plans, changes in the design of those plans, the
price of our shares and the performance of our Company can all cause stock-based compensation expense to vary from period
to period.
Results of Operations
Basis of Presentation
Our DIS business currently represents our one reportable business segment. The DIS business for each of the three
years ended December 31, 2015 accounted for more than 90% of our consolidated net revenues from continuing operations.
Our other operating segments consist of our DS businesses. For further details regarding our business segment information, see
Note 19 to the consolidated financial statements.
The results of operations for NID and HemoCue have been classified as discontinued operations in the accompanying
consolidated statements of operations and related disclosures for all periods presented. In December 2012, we committed to a
plan to sell HemoCue and completed the sale of HemoCue in April 2013. We began reporting NID, a test kit manufacturing
subsidiary which was wound down in 2006, as a discontinued operation in 2006 and will continue to report NID as a
discontinued operation until uncertain tax benefits associated with NID are resolved. For further details regarding our
discontinued operations, see Note 18 to the consolidated financial statements.
QUEST DIAGNOSTICS 2015 ANNUAL REPORT ON FORM 10-K