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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)
F- 16
In January 2015, the Company adopted a course of action related to its multi-year Invigorate program to further reduce
its cost structure through 2017. This multi-year course of action continues to focus on the flagship program opportunities and
new key opportunities such as: standardizing processes, information technology systems, equipment and data; enhancing
electronic enabling services; and enhancing reimbursement for work performed.
The following table provides a summary of the Company's pre-tax restructuring charges associated with its Invigorate
program and other restructuring activities:
2015 2014 2013
Employee separation costs $ 38 $ 31 $ 69
Facility-related costs 1 12 6
Asset impairment charges — 1 —
Accelerated vesting of stock-based compensation — — 1
Total restructuring charges $ 39 $ 44 $ 76
Total restructuring charges incurred in the year ended December 31, 2015 are primarily associated with various
workforce reduction initiatives as the Company continued to simplify and restructure its organization. Of the total $39 million
in restructuring charges incurred during the year ended December 31, 2015, $32 million and $7 million were recorded in cost of
services and selling, general and administrative expenses, respectively.
Total restructuring charges incurred in the year ended December 31, 2014 are primarily associated with various
workforce reduction initiatives as the Company continued to simplify and restructure its organization. Of the total $44 million
in restructuring charges incurred during the year ended December 31, 2014, $21 million and $23 million were recorded in cost
of services and selling, general and administrative expenses, respectively.
Total restructuring charges incurred during 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.
Charges for all 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, 2015 and 2014, which is
included in accrued expenses in Note 12:
Employee
Separation
Costs
Facility-
Related
Costs Total
Balance, December 31, 2013 $ 31 $ 5 $ 36
Income statement expense 31 12 43
Cash payments (44)(6)(50)
Balance, December 31, 2014 18 11 29
Income statement expense 38 1 39
Cash payments (40)(6)(46)
Other / adjustments — (3)(3)
Balance, December 31, 2015 $ 16 $ 3 $ 19
QUEST DIAGNOSTICS 2015 ANNUAL REPORT ON FORM 10-K