Slide 1: Third Quarter 2015
Third Quarter 2015 October 22, 2015
Slide 2: Safe Harbor Disclosure
Safe Harbor Disclosure The statements in this presentation which are not historical facts may be forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management’s current esti
Slide 3: Key Messages
Key Messages “We delivered another good quarter as we grew equivalent revenues by 1% and both adjusted operating income and earnings by 7%. We are pleased with the progress we’re making to grow our business and we are investing in the future to capture the power of data analytics and enable precisio
Slide 4: Q3 2015 Performance
Q3 2015 Performance ($ in millions - except EPS) Q3 Δ 2014 Revenues * $ 1,880 0.9% - DIS Revenues $ 1,764 0.0% - Rev/Req 0.2% - Volume (0.2)% Increase in adjusted operating income and adjusted operating income as a % of revenues was primarily due Adjusted Operating Income * $ 325 6.8% to benefits fr
Slide 5: Q3 2015 YTD Performance
Q3 2015 YTD Performance ($ in millions - except EPS) YTD Δ 2014 Revenues * $ 5,644 2.3% DIS revenues and volume increased primarily due to acquisitions. Revenue per requisition benefited from test - DIS Revenues $ 5,227 1.7% and business mix shifts. - Rev/Req 0.1% - Volume 1.5% Increase in adjusted
Slide 6: Our 5 Point Strategy
Our 5 Point Strategy 1 • Restore: Restore Growth 2 • Drive: Drive operational excellence 3 • Simplify: Simplify the organization to enable growth and productivity 4 • Refocus: Refocus on diagnostic information services • Deliver: Deliver disciplined capital deployment and strategically aligned 5 acc
Slide 7: 2015 Outlook
2015 Outlook* Full year 2015 revenue now expected to approximate $7.49 billion. Adjusted diluted EPS excluding amortization expense to be between $4.75 and $4.80. Adjusted cash provided by operations to exceed $850 million. Capital expenditures to approximate $275 million. * Before special i
Slide 8: Non-GAAP Reconciliations
Non-GAAP Reconciliations The adjusted measures on page 4 and 5 are presented because management believes those measures are useful adjuncts to reported results under accounting principles generally accepted in the United States when comparing results of operations from period to period. Adjusted mea
Slide 9: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 (dollars in millions, except per share data) Adjusted diluted EPS excluding amortization expense: Diluted earnings per common share $ 2.35 $ 0.88 $ 3.58 $ 2.51 Gain on contribution of busine
Slide 10: Non-GAAP Reconciliations
Non-GAAP Reconciliations (a) Represents the gain associated with the contribution of our clinical trial testing business to Q Squared Solutions, the clinical trials joint venture with Quintiles Transnational Holdings Inc. (b) Represents costs primarily associated with workforce reductions and profes
Slide 11: Non-GAAP Reconciliations
(c) For the nine months ended September 30, 2015, primarily represents non-cash asset impairment charges primarily associated with our Celera Products business and costs incurred related to legal matters, partially offset by a pre-tax gain of $13 million associated with a decrease in the fair value
Slide 12: Non-GAAP Reconciliations
Non-GAAP Reconciliations (g) Represents the impact of amortization expense on diluted earnings per common share, net of the income tax benefit. The income tax benefit was primarily calculated using combined tax rates of 38.9% and 38.2% for 2015 and 2014, respectively. The pre-tax amortization expens
Slide 13: 2015 Outlook
2015 Outlook The following table reconciles our 2015 outlook for adjusted diluted EPS excluding amortization expense and adjusted cash provided by operations to the corresponding amounts determined under accounting principles generally accepted in the United States: Low High Adjusted diluted EPS exc
Slide 14: 2015 Outlook
(b) Represents pre-tax charges of $150 million, incurred through September 30, 2015, associated with the retirement of debt and related refinancing charges in connection with the Tender Offer and Redemption. (c) Represents pre-tax charges of $83 million primarily associated with workforce reductions
Slide 15: Quest Diagnostics
(@, Quest Diagnostics