Quest Diagnostics (DGX) 10-K risk factor changes: FY2017 vs FY2016

| This Report also includes forward-looking statements that involve risks or uncertainties. Our results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks we face described below and elsewhere. See “Cautionary Factors that May Affect Future Results” on page [removed: [41](#s08CB56B778D25783D519E2AB2F848C05).] [added: 43.] |

The U.S. healthcare system is evolving, in part in response to the passage of the [removed: Affordable Care Act ("ACA")] [added: ACA] in 2010.

[removed: The ACA established] [added: As part of legislation enacted in early 2018,] the Independent Payment Advisory Board, which [removed: is] [added: under the ACA was to be] responsible [added: annually] to submit [removed: annually] proposals aimed at reducing Medicare cost growth while preserving [removed: quality.][added: quality, was repealed.]

[removed: Further, the] [added: The] ACA established the Center for Medicare and Medicaid Innovation to examine alternative payment methodologies and conduct demonstration programs.

The [removed: newly-elected] President of the United States has announced that he favors repealing the [removed: ACA in 2017, and leaders of the Republication-controlled federal legislature also have expressed a desire to repeal the] ACA.

[added: The scope and timing of any further] legislation to repeal, amend, replace, or reform the [added: rest of the] ACA is uncertain, but if such legislation were to become law, it could have a significant impact on the U.S. healthcare system.

For example, [removed: ACOs] [added: ACOs, IDNs] and patient-centered medical homes [removed: are growing] [added: have grown] as a means to deliver patient care.

Value-based reimbursement is increasing; CMS has set goals for value-based reimbursement to be [removed: achieved in coming years.][added: achieved.]

Increased hospital ownership of physician practices [added: may] enhance clinician ties to hospital-affiliated laboratories and may strengthen their competitive position.

[removed: Also in recent years,] [added: Also,] states have mandated that Medicaid beneficiaries enroll in private managed care arrangements.

[added: Recently, state budget pressures] have encouraged states to consider several courses of action that may impact our business, such as delaying payments, reducing reimbursement, restricting coverage eligibility, denying claims and service coverage restrictions.

Some health plans also are reviewing test coding, evaluating coverage decisions and [removed: considering steps such as] requiring preauthorization of [added: certain] testing.

The ACA included provisions, including [removed: ones] regarding the creation of healthcare exchanges, that may encourage health insurance plans to increase exclusive contracting.

These steps [added: may] discourage innovation and access to innovative solutions that we may offer.

We also are subject from time to time to qui tam claims brought by former employees or other “whistleblowers.” The federal and state governments continue [removed: to strengthen their scrutiny and] [added: aggressive] enforcement efforts against perceived healthcare fraud.

Legislative provisions relating to healthcare fraud and abuse provide government enforcement personnel [removed: substantially increased] [added: substantial] funding, powers, penalties and remedies to pursue suspected cases of fraud and abuse.

The FDA has regulatory responsibility over, among other areas, instruments, [added: software,] test kits, reagents and other devices used by clinical laboratories to perform diagnostic testing in the U.S. A number of tests we develop internally are offered as LDTs.

[removed: Effective commencing in November 2016,] [added: The majority of] billing and related operations for our Company are being provided by a third party under the Company's oversight.

In addition to the data breach reported in December 2016, our IT systems from time to time have experienced other [removed: minor] attacks, [removed: minor] viruses, attempted intrusions or similar problems, [removed: like other major companies,] but each was [removed: mitigated, and none materially disrupted, interrupted, damaged or shutdown the Company's IT systems, materially disrupted the Company's performance of its business or, to the Company's knowledge, resulted in material unauthorized access to data.][added: mitigated.]

We have taken, and continue to take, precautionary measures to [added: reduce the risk of, better detect and respond to future cyber threats, and] prevent or minimize vulnerabilities in our IT systems, including the loss or theft of intellectual property and other confidential information that we house on our systems.

The [removed: clinical testing] [added: diagnostic information services] industry is faced with changing technology and new product introductions.

As of December 31, [removed: 2016,] [added: 2017,] we had approximately [removed: $3.7] [added: $3.8] billion of debt outstanding.

If we do not adequately safeguard that information [added: (including in compliance with the requirements of the European Union General Data Protection Regulation beginning in May 2018)] and it were to become available to persons or entities that should not have access to it, our business could be impaired, our reputation could suffer and we could be subject to fines, penalties and litigation.

The American Medical Association CPT® Editorial Panel is continuing its process of establishing [added: new] billing codes to replace codes that describe procedures used in performing molecular testing and toxicology testing.

[removed: This] [added: The adoption of these codes on certain occasions] has led, and could continue to lead, to limited coverage decisions, payment denials or new procedures or conditions for payment.

Some [removed: of the] proceedings against us involve claims that are substantial in amount and could divert management's attention from operations.

[added: |] (1) [added: |] the requirements of [removed: Medicare carriers] [added: payors] to provide diagnosis codes for many commonly ordered tests and the possibility that third-party payers will increasingly adopt similar requirements; [added: |]

| (5) | the impact of increased prior authorization [removed: programs for clinical testing.] [added: programs.] |

| (m) | Adverse publicity and news coverage about the [removed: clinical testing] [added: diagnostic information services] industry or us. |

| (x) | Failure to adapt to changes in the healthcare system and healthcare delivery, including those stemming from the ACA (or its repeal, amendment or replacement), [added: PAMA,] trends in utilization of the healthcare system and increased patient financial responsibility for services. |

In 2017, the federal legislature undertook efforts to repeal, revise or replace the ACA, and the individual mandate adopted as part of the ACA was repealed.

In more recent legislation, some additional aspects of the ACA were modified: another two-year moratorium was implemented on the device tax imposed on the sellers of certain medical devices in the U.S., including those purchased and used by laboratories; the tax on health insurers was delayed for a year; and the "Cadillac tax" on certain employee benefit plans was also delayed for two years.

Congress

periodically considers cost-saving initiatives.

PAMA is impacting the diagnostic information services industry.

Pursuant to this legislation, CMS has revised the Medicare Clinical Laboratory Fee Schedule for 2018, 2019 and 2020.

Under the revised Medicare Clinical Laboratory Fee Schedule, reimbursement for clinical laboratory testing is scheduled to be reduced in 2018, 2019 and 2020.

PAMA calls for further revision of the Medicare Clinical Laboratory Fee Schedule for years after 2020, based on future surveys of market rates; further reduction in reimbursement may result from such revisions.

In 2017, CMS issued a draft national coverage policy for next-generation sequencing cancer panels.

The draft policy, were it finalized without change, would effect a de facto requirement that each laboratory test using next generation sequencing technology would need to be approved or cleared by the FDA before it is covered by Medicare.

Third parties, including health plans, have not announced any change in approach to coverage for next-generation sequencing cancer panels.

Pursuant to the 21st Century Cures Act, the FDA has issued guidance regarding the regulation of clinical decision support software, which may be used in, or in connection with, LDTs.

The guidance has created uncertainty regarding whether FDA approval of certain tests is required.

In 2017, the FDA published a "Discussion Document" providing its views on legislative alternatives to regulate LDTs.

Although none materially disrupted, interrupted, damaged or shutdown the Company's IT systems, materially disrupted the Company's performance of its business or, to the Company's knowledge, resulted in material unauthorized access to data, there can be no assurance that we will be able to similarly mitigate future attacks, viruses or intrusions.

In addition, we collaborate with government agencies regarding potential cyber threats and have worked with a leading cyber security firm to evaluate and strengthen our systems.

| | |

| --- | --- |

The ACA provided for reductions in the Medicare clinical laboratory fee schedule of 1.75% for five years beginning in 2011 and also included a productivity adjustment that reduced the CPI market basket update since 2011.

The ACA imposes an excise tax on the seller for the sale of certain medical devices in the U.S., including those purchased and used by laboratories; effective January 2016, Congress imposed a two-year moratorium on the device tax.

These proposals automatically will be implemented unless Congress enacts alternative proposals that achieve the same savings targets.

The scope and timing of any

Recently, state budget pressures

Congress periodically considers cost-saving initiatives as part of its deficit reduction discussions.

2014 U.S. federal legislation, the Protecting Access to Medicare Act of 2014, is impacting the clinical testing industry.

Key parts of this legislation included provisions that provide for the establishment of an advisory panel and a market-based process to rebase the Clinical Laboratory Fee Schedule, developing a new fee schedule and limiting reductions in that fee schedule; currently it is anticipated that the new fee schedule would be come effective in 2018.

If this process does not recognize the value that clinical testing services bring to the healthcare system, our business can be materially adversely impacted.

The FDA has published a "Discussion Document" that provides the FDA's views on legislation to govern LDTs.

In December 2016, we reported that an internet application on our IT network had been the target of an external cyber attack, resulting in the theft of certain patient data.

In addition, we are working with law enforcement, as well as a leading cyber security firm, to investigate and further evaluate and strengthen our systems and continue to strengthen precautionary measures to reduce the risk of, and to detect and respond to, future cyber threats.

Our business could be adversely impacted by adoption of new coding for tests.

The adoption of these codes is allowing payers to better determine tests being performed.

Health plans, Medicare contractors and Medicaid programs continue to consider or implement the new codes and issue coverage and payment decisions.

| See page [removed: [56](#s050BEC28589B55852F35E2AB2ACEDEE8).] [added: [59](#s20C1F4539BEBB419147D5534C02F8AA2).] |

We conduct business through our headquarters in [removed: Madison,] [added: Secaucus,] New Jersey, and our laboratories, patient service centers, offices and other facilities around the United States and in selected locations outside the United States.

During [removed: 2016,] [added: 2017,] we generated net revenues of [removed: $7.5] [added: $7.7] billion.

Additional financial information concerning Quest Diagnostics, including our consolidated subsidiaries and businesses, for each of the years ended December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] is included in the consolidated financial statements and notes thereto in “Financial Statements and Supplementary Data” in Part II, Item 8.

| Table 1 - Vision, Goals and Values | [removed: 2] [added: 3] |

| Table 2 - Two Point Business Strategy | [removed: 2] [added: 3] |

| Table 3 - Portfolio Growth | [removed: 3] [added: 4] |

| Table 4 - Strategies to Accelerate Growth | [removed: 3] [added: 4] |

| Table 5 - Key Professional [removed: Lab] [added: Laboratories] Services Offerings | [removed: 4] [added: 5] |

| Table 6 - Clinical Franchises | [removed: 4] [added: 5] |

| Table 7 - Consumer-Centric Initiatives to Accelerate Growth | [removed: 5] [added: 6] |

| Table 8 - [removed: 2016] [added: Recent] Consumer-Centric Initiatives | [removed: 5] [added: 6] |

| Table 9 - [removed: Four] [added: Five] Major Themes to Drive Operational Excellence | [removed: 6] [added: 7] |

| Table 10 - Invigorate Cost Excellence Program [added: - Flagship Programs] | [removed: 6] [added: 7] |

| Table [removed: 11] [added: 10] - Invigorate Cost Excellence Program - [removed: Savings] [added: Flagship Programs] | [removed: 6] |

| Table [removed: 12] [added: 11] - Positioned to Grow and Continue to Lead | 7 |

| Table [removed: 13] [added: 12] - Assets and Capabilities | [removed: 8] [added: 9] |

| Table [removed: 14] [added: 13] - New or Enhanced Disease Area Solutions | 10 |

| Table [removed: 15] [added: 14] - Sample Collaborations | 12 |

| Table [removed: 16] [added: 15] - [removed: 2016] [added: 2017] Medical and Scientific | 13 |

| Table 17 - [removed: QuanumTM] [added: Quanum®] Health Information Technology Solutions | [removed: 13] [added: 16] |

| Table [removed: 18] [added: 16] - [removed: 2016] [added: 2017] Net Revenues | 14 |

| Table [removed: 19] [added: 18] - U.S. Clinical Testing Industry | [removed: 18] [added: 17] |

| Table [removed: 20] [added: 19] - Key Trends | 18 |

| Table 21 - Customers | [removed: 21] [added: 23] |

| Table [removed: 23] [added: 22] - Factors [removed: Traditionally] Considered When Selecting a Diagnostics Information Services Provider | [removed: 24] [added: 25] |

| Table [removed: 24] [added: 23] - [removed: 2016] [added: 2017] Medicare and Medicaid Revenues [added: as % of Consolidated Net Revenues] | [removed: 27] [added: 29] |

| Table [removed: 25] [added: 24] - Key Regulatory Schemes | [removed: 28] [added: 30] |

| Table [removed: 26] [added: 25] - Information Available at Our Corporate Governance Webpage | [removed: 30] [added: 32] |

| Table [removed: 27] [added: 26] - Executive Officers | [removed: 31] [added: 33] |

[removed: In 2015 and 2016, we continued to execute] [added: We executed] on this strategy, and at our Investor Day in November 2016, we updated our strategy to reflect our progress, narrowing our focus to two elements.

| [removed: 2.] [added: Table 9 - Five Major Themes to] Drive [removed: operational excellence] [added: Operational Excellence] | [added: |]

| Advanced Diagnostics | Testing services providing faster growth through innovation testing model | Genetic and advanced molecular testing services An important part of precision medicine A growing set of unique, innovation-based competitors | Rich clinical, scientific and medical innovation expertise Quality and reliability of new assays [removed: Ability to manage potential new regulatory requirements] [added: Delivering on amplified customer expectations] |

| Diagnostic Services | Laboratory and data-related healthcare opportunities providing faster growth | Enables partners to deliver health care more efficiently (e.g., risk assessment; Professional [removed: Lab] [added: Laboratory] Services; wellness) Services to support population health (e.g., data analytics; extended care services) | Extensive diagnostic capability Large and growing database and analytics expertise Partnerships with industry leaders across healthcare landscape |

The Company's collaborations are discussed more fully below, in connection with table [removed: 15.][added: 14.]

The Company [removed: maintains] [added: has maintained] a strategy, unchanged since November 2012, to grow 1-2% per year through accretive, strategic acquisitions.

The Company's approach to acquisitions is discussed below on page [removed: 7,] [added: 8,] under the heading Deliver disciplined capital deployment.

We also are seeking to more effectively partner with [removed: independent delivery networks, including hospital health systems ("IDNs"),] [added: IDNs,] on their laboratory testing strategy.

We have deployed a dedicated health systems team to strengthen our [removed: relationships with IDNs, including with respect to their reference testing.]

We provide reference testing for approximately 50% of hospitals in the U.S., and are the [removed: number one] [added: leading] provider of this testing in the country.

| Table 5 - Key Professional [removed: Lab] [added: Laboratory] Services Offerings | |

In 2017, we celebrated 50 years of life-changing results.

| Table 20 - Contributing to Reducing Healthcare Costs and Improving Care | 22 |

The discussion also uses the following defined terms:

ACA - Affordable Care Act

ACO - Accountable Care Organization

CAP - The College of American Pathologists

CLIA - Clinical Laboratory Improvement Act

CMS - Centers for Medicare and Medicaid Services

FDA - U.S. Food and Drug Administration

IDN - Independent Delivery Network (including hospital health systems)

IPA - Independent Physician Association

LDT - Laboratory-Developed Test

PAMA - The Protecting Access to Medicare Act of 2014


Our Board of Directors has reviewed our strategy.


In 2017, the Company forged several new strategic relationships, including with Wal-Mart Stores, Inc., Cleveland Clinic, McKesson Specialty Health, U.S. Oncology Network and Texas Oncology.

relationships with IDNs, including with respect to their reference testing.

In 2017, we implemented new Professional Laboratory Services relationships with Montefiore Health System, a premier academic health system in the New York City area, and PeaceHealth Laboratories, in three Pacific Northwest states.

We are more than just a laboratory.

The preferred provider relationship that we announced in 2017 with U.S. Oncology Network is an example of this.

Our collaboration with Cleveland Clinic, as well as our collaboration with McKesson Specialty Health, U.S. Oncology Network and Texas Oncology, are examples we announced in 2017 of our approach to such partnerships.

| Expand access to basic health care services | • Launched partnership with Wal-Mart Stores to expand access to basic health care services. |

| Expand sports diagnostics offering | • Continued enhancement and expansion of our Blueprint for Athletes® offerings. |

Support population health with data analytics and extended care services.

Our joint venture with Wal-Mart Stores, and our Chronic Care Management offering, both launched in 2017, are examples of our efforts to accelerate growth in this manner.

| Increase digital enablement | Expand margins through cost excellence program |

| Inspire and engage employees | Transform platform for growth |

| Deliver quality and service with Quest Management System | |

In 2017, we made strong progress on our initiatives.

For example, we completed implementation of our new logistics system, have outfitted 60% of our patient service centers with electronic patient check-in and have reduced results-only call volume by nearly 20% compared to 2016 through increased adoption of our digital solutions.

We exited 2017 with total run-rate savings in excess of $1.3 billion, compared to 2011.

The Company plans to continue to pursue opportunities to achieve additional cost savings.

| Deliver strong value | |

We have a foundation of three strong operating principles: strengthen organizational capabilities; deliver disciplined capital deployment; and remain focused on diagnostic information services.

Strengthen organizational capabilities.

Highlights include:

develop new capabilities to improve our Company.

| • | Employees reported higher engagement levels compared to prior years. |

In 2017, we acquired:

| Table 22 - Sample Third Party Payers | 23 |

| Table 1 - Vision, Goals and Values | |

| Vision | Empowering Better Health with Diagnostic Insights |

| Three Aspirational Goals | Promote a healthier world Build value Create an inspiring workplace |

| Values | Quality Integrity Accountability Innovation Collaboration Leadership |

At our Investor Day in November 2014, we reaffirmed and shared progress on our strategy.

| |

| --- |

| Table 2 - Two Point Business Strategy |

| 1. Accelerate growth |

Simplifying and strengthening the organization, disciplined capital deployment and refocusing on diagnostic information services were part of our five-point strategy; these have now become operating principles of the Company.

At our Investor Day in November 2016, we also shared progress on these three operating principles.

The following discussion focuses on our two-point strategy; the three operating principles are discussed below under "Our Strengths."

| | | | |

| --- | --- | --- | --- |

In 2016, the Company forged several new strategic relationships, including with IBM Watson® Health, Optum (a subsidiary of UnitedHealth Group), Safeway and AncestryDNA.

In 2016, we implemented new Professional Lab Services relationships with RWJBarnabas Health, the largest health care system in New Jersey, and HCA's HealthOne system in the Denver, Colorado area.

| • Launched Blueprint for Athletes®, our service to empower athletes to track their progress and training, in the consumer market. |

Support population health.

During 2016, the Company secured its initial customers for Data Diagnostics®.

For example, since 2014, we have improved EMR interface turnaround time by 20%, reduced recollections in patient services by over 15%, reduced wait time in our patient service centers by over 12% and reduced missed pickups by over 12%.

In 2016, we launched electronic check-in for patients in our patient service centers and real-time payment determination with several major payers.

| Table 9 - Four Major Themes to Drive Operational Excellence | |

| Major Themes | Examples |

| Reduce denials by payers and bad debt | • Patient payment transparency • Real-time payment determination • Optum partnership |

| Standardize | • Lab information and billing systems • In vitro diagnostics • Lab equipment asset management, maintenance and service • Lab test menus |

| Enable digital services | • Pre-visit registration • Enhanced appointment scheduling • Patient check-in • Test requisitions • Same day sample pickup • Ordering supplies |

| Optimize/Automate | • Optimize lab, patient services and administrative networks • Automate microbiology and rest of laboratory • Continuous improvement |

We believe that many of these efforts also strengthen our foundation for growth.

For example, in 2016 we commenced the rollout of our improved logistics management system, strengthening and enhancing the efficiency of our courier system, and enhanced the functionality of our physician portal, improving the customer experience and reducing cost.

| Table 10 - Invigorate Cost Excellence Program | |

| Flagship Programs | |

| Four Major Themes | |

| Reduce denials by payers and bad debt | |

| Standardize | |

| Enable digital services | |

| Optimize/Automate | |

The Company believes that the opportunities to drive operational excellence and achieve additional cost savings will continue after 2017.

The following chart provides information regarding our Invigorate program savings.

| Table 11 - Invigorate Cost Excellence Program - Savings | |

For the Fiscal Year Ended December 31, [removed: 2016][added: 2017]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company, or an emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [removed: company”] [added: company,” and "emerging growth company"] in Rule 12b-2 of the Exchange Act.

[removed: Large accelerated filer X Accelerated filer] [added: |] Non-accelerated filer [removed: (do] [added: o (Do] not check if a smaller reporting company) [added: | Smaller reporting company o |]

As of June 30, [removed: 2016,] [added: 2017,] the aggregate market value of the approximately [removed: 139] [added: 136] million shares of voting and non-voting common equity held by non-affiliates of the registrant was approximately [removed: $11.3] [added: $15.1] billion, based on the closing price on such date of the registrant's Common Stock on the New York Stock Exchange.

As of January 31, [removed: 2017,] [added: 2018,] there were outstanding [removed: 137,495,276] [added: 135,637,852] shares of the registrant’s common stock, $.01 par value.

| Portions of the registrant's Proxy Statement to be filed by April 30, [removed: 2017] [added: 2018] | Part III |

| Item 1. | [removed: [Business](#s16C5150F272B92038DC3E2AB2DE3F886)] [added: [Business](#sDF3288EC8B14EC04285A5534C7048353)] | [removed: [1](#s16C5150F272B92038DC3E2AB2DE3F886)] [added: [1](#sDF3288EC8B14EC04285A5534C7048353)] |

| | [Our Strategy and [removed: Strengths](#s4BE7B8C012179EE179DCE2AB2E0560BB)] [added: Strengths](#s72AD56FCEA3FB46618D75534C725618B)] | [removed: [2](#s4BE7B8C012179EE179DCE2AB2E0560BB)] [added: [3](#s72AD56FCEA3FB46618D75534C725618B)] |

| | [Business [removed: Operations](#s3E7B0AD8045B23422A21E2AB2E37BEEC)] [added: Operations](#s01C5E06D82A82EE5D2D75534C75769FB)] | [removed: [14](#s3E7B0AD8045B23422A21E2AB2E37BEEC)] [added: [14](#s01C5E06D82A82EE5D2D75534C75769FB)] |

| | [The United States Clinical Testing [removed: Market](#s6ED138E86D3860638580E2AB2E587F15)] [added: Market](#sCF07A4A76155CC9E89A15534C779CE68)] | [removed: [17](#s6ED138E86D3860638580E2AB2E587F15)] [added: [17](#sCF07A4A76155CC9E89A15534C779CE68)] |

| | [Billing and [removed: Reimbursement](#s0B31B95B357D3DE3BF3EE2AB2EAC86CE)] [added: Reimbursement](#sB23CE0D7C46D4B1591285534C7CCD427)] | [removed: [26](#s0B31B95B357D3DE3BF3EE2AB2EAC86CE)] [added: [28](#sB23CE0D7C46D4B1591285534C7CCD427)] |

| | [Available [removed: Information](#sF3C4F75CE9FBD568C697E2AB2EFE2EC3)] [added: Information](#s75F2FD51EAEB4D6BC58A5534C81F113C)] | [removed: [30](#sF3C4F75CE9FBD568C697E2AB2EFE2EC3)] [added: [32](#s75F2FD51EAEB4D6BC58A5534C81F113C)] |

| | [Executive Officers of the [removed: Company](#s90021BF3E1328DF4FDE6E2AB2F30279F)] [added: Company](#sEADD9F75BE4BD512AD155534C851AAB1)] | [removed: [31](#s90021BF3E1328DF4FDE6E2AB2F30279F)] [added: [33](#sEADD9F75BE4BD512AD155534C851AAB1)] |

| Item 1A. | [Risk [removed: Factors](#s90940256B406698A6463E2AB2F52BFF3)] [added: Factors](#sE7FD25EE224C5FB841625534C8738045)] | [removed: [33](#s90940256B406698A6463E2AB2F52BFF3)] [added: [35](#sE7FD25EE224C5FB841625534C8738045)] |

| | [Cautionary Factors That May Affect Future [removed: Results](#s08CB56B778D25783D519E2AB2F848C05)] [added: Results](#sD56AABD3267C2D7AA4F65534C8A590B3)] | [removed: [41](#s08CB56B778D25783D519E2AB2F848C05)] [added: [43](#sD56AABD3267C2D7AA4F65534C8A590B3)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#sE7197B8AA43F67568D1BE2AB2FA64854)] [added: Comments](#sC940B13D7955B65F864C5534C8C6533C)] | [removed: [42](#sE7197B8AA43F67568D1BE2AB2FA64854)] [added: [44](#sC940B13D7955B65F864C5534C8C6533C)] |

| Item 2. | [removed: [Properties](#s230A430C5FB9C7F1728AE2AB2FD72DFA)] [added: [Properties](#sF3B8B2945C4EB8F4C0DF5534C8F84A08)] | [removed: [42](#s230A430C5FB9C7F1728AE2AB2FD72DFA)] [added: [44](#sF3B8B2945C4EB8F4C0DF5534C8F84A08)] |

| Item 3. | [Legal [removed: Proceedings](#s353E875225BE674309FDE2AB2FF874D6)] [added: Proceedings](#s9D1C2E2E8CA6B7FA06935534C919AE03)] | [removed: [43](#s353E875225BE674309FDE2AB2FF874D6)] [added: [45](#s9D1C2E2E8CA6B7FA06935534C919AE03)] |

| Item 4. | [Mine Safety [removed: Disclosures](#sCFFB474E6235CE335367E2AB302A5D39)] [added: Disclosures](#s715BA07818D800396AE25534C94B25F8)] | [removed: [43](#sCFFB474E6235CE335367E2AB302A5D39)] [added: [45](#s715BA07818D800396AE25534C94B25F8)] |

| Item 5. | [Market for Registrant's Common Stock, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s720E9B45B7F88B930B66E2AB25F06A36)] [added: Securities](#s55A70252AEC299655E135534C10131AE)] | [removed: [44](#s720E9B45B7F88B930B66E2AB25F06A36)] [added: [46](#s55A70252AEC299655E135534C10131AE)] |

| Item 6. | [Selected Financial [removed: Data](#sCCEEF22F4943BE59685EE2AB30A0BC9D)] [added: Data](#sB8F4D468CDB588643DCB5534C9C6D0CC)] | [removed: [46](#sCCEEF22F4943BE59685EE2AB30A0BC9D)] [added: [48](#sB8F4D468CDB588643DCB5534C9C6D0CC)] |

| Item 7. | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s272E027453E4ECFD20E6E2AB30D1C5DF)] [added: Operations](#s03504263751602ED47FC5534C9F28D48)] | [removed: [46](#s272E027453E4ECFD20E6E2AB30D1C5DF)] [added: [48](#s03504263751602ED47FC5534C9F28D48)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s7F699DF04A7978070070E2AB30F22910)] [added: Risk](#sB27D98CD7BEFEC5597F35534CA127B27)] | [removed: [46](#s7F699DF04A7978070070E2AB30F22910)] [added: [48](#sB27D98CD7BEFEC5597F35534CA127B27)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s87D97B2F56054C211F2DE2AB31246100)] [added: Data](#s8C5AEAEC4E0A4D5CCF925534CA452B49)] | [removed: [46](#s87D97B2F56054C211F2DE2AB31246100)] [added: [48](#s8C5AEAEC4E0A4D5CCF925534CA452B49)] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s9EE386620C565762C32EE2AB31469EFD)] [added: Disclosure](#sDB80FE23327680CB8FE55534CA67352F)] | [removed: [46](#s9EE386620C565762C32EE2AB31469EFD)] [added: [48](#sDB80FE23327680CB8FE55534CA67352F)] |

| Item 9A. | [Controls and [removed: Procedures](#s22F18A7C7F1639A84B39E2AB31780D98)] [added: Procedures](#sD560B5466B786C2056A15534CA9919A9)] | [removed: [46](#s22F18A7C7F1639A84B39E2AB31780D98)] [added: [48](#sD560B5466B786C2056A15534CA9919A9)] |

| Item 9B. | [Other [removed: Information](#s124703CDC27189027241E2AB31998644)] [added: Information](#s741E610D9A1A292C578A5534CAB9D982)] | [removed: [46](#s124703CDC27189027241E2AB31998644)] [added: [48](#s741E610D9A1A292C578A5534CAB9D982)] |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#s799D3D840F68C9CEE229E2AB31ECAADF)] [added: Governance](#s0EA6D55CB2C714564D065534CB0D74D5)] | [removed: [48](#s799D3D840F68C9CEE229E2AB31ECAADF)] [added: [49](#s0EA6D55CB2C714564D065534CB0D74D5)] |

| Item 11. | [Executive [removed: Compensation](#s4614CD49B03A3D269041E2AB321ED07B)] [added: Compensation](#s3C8EBCDC768D22A451CF5534CB3FF25A)] | [removed: [48](#s4614CD49B03A3D269041E2AB321ED07B)] [added: [49](#s3C8EBCDC768D22A451CF5534CB3FF25A)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholders' [removed: Matters](#sC14999C81B870FEBBFA8E2AB3240D87E)] [added: Matters](#s052CAB2E53F102F5C15D5534CB611026)] | [removed: [48](#sC14999C81B870FEBBFA8E2AB3240D87E)] [added: [49](#s052CAB2E53F102F5C15D5534CB611026)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#sF8AD9F48AF0902C39259E2AB3272FE1F)] [added: Independence](#s88C6F7BCDB7A3C3276955534CB93E8F3)] | [removed: [48](#sF8AD9F48AF0902C39259E2AB3272FE1F)] [added: [49](#s88C6F7BCDB7A3C3276955534CB93E8F3)] |

| Item 14. | [Principal Accounting Fees and [removed: Services](#s72942CF1E007CDAD10D5E2AB3293C8D9)] [added: Services](#s363C9969107243AFCCCD5534CBB44B3D)] | [removed: [48](#s72942CF1E007CDAD10D5E2AB3293C8D9)] [added: [49](#s363C9969107243AFCCCD5534CBB44B3D)] |

| Item 15. | [Exhibits, Financial Statement [removed: Schedules](#s439ADFB913C7EA1A2FC8E2AB32E6333D)] [added: Schedules](#sBC71F8BF5B4D2075CACE5534CC066F56)] | [removed: [49](#s439ADFB913C7EA1A2FC8E2AB32E6333D)] [added: [50](#sBC71F8BF5B4D2075CACE5534CC066F56)] |

| [Selected Historical Financial Data of Our [removed: Company](#s1F1ABF38929A66DF89FCE2AB2614B7EF)] [added: Company](#s52CDBAB0613B7E12CB4D5534BF04A988)] | | [removed: [52](#s1F1ABF38929A66DF89FCE2AB2614B7EF)] [added: [54](#s52CDBAB0613B7E12CB4D5534BF04A988)] |

| [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s050BEC28589B55852F35E2AB2ACEDEE8)] [added: Operations](#s20C1F4539BEBB419147D5534C02F8AA2)] | | [removed: [56](#s050BEC28589B55852F35E2AB2ACEDEE8)] [added: [59](#s20C1F4539BEBB419147D5534C02F8AA2)] |

| [Report of Management on Internal Control Over Financial [removed: Reporting](#s2860E3DC844E6EDEFC60E2AB34343276)] [added: Reporting](#sA198B98E4564FEACFF075534CD542552)] | | [removed: [76](#s2860E3DC844E6EDEFC60E2AB34343276)] [added: [78](#sA198B98E4564FEACFF075534CD542552)] |

| [Report of Independent Registered Public Accounting [removed: Firm](#s40B4A35F5DB8F72605BEE2AB34665D97)] [added: Firm](#s437B753D002FE2826A925534CD86E83E)] | | [F- [removed: 1](#s40B4A35F5DB8F72605BEE2AB34665D97)] [added: 1](#s437B753D002FE2826A925534CD86E83E)] |

| [Consolidated Financial Statements and Related [removed: Notes](#s8A387CA143319FB0AF96E2AB348738B7)] [added: Notes](#sA1C80CE2E0F4A033BE595534CDA87C59)] | | [F- [removed: 2](#s8A387CA143319FB0AF96E2AB348738B7)] [added: 3](#sA1C80CE2E0F4A033BE595534CDA87C59)] |

| [Supplementary Data: Quarterly Operating Results [removed: (unaudited)](#s7A47F4FA61E11FDCCAAAE2AB207B70B5)] [added: (unaudited)](#sBF6A8A645AA943809B165534BA311345)] | | [F- [removed: 43](#s7A47F4FA61E11FDCCAAAE2AB207B70B5)] [added: 44](#sBF6A8A645AA943809B165534BA311345)] |

10-K 1 dgx1231201710-k.htm 10-K

500 Plaza Drive

Secaucus, New Jersey 07094

| Large accelerated filer x | Accelerated filer o |

| Emerging growth company o | |

| | |

| --- | --- |

| | |

| | [General](#s26E25F4FC148C851B22E5534C7AB2CA4) | [25](#s26E25F4FC148C851B22E5534C7AB2CA4) |

| | [Regulation](#sAFE12A5FB42CA917F8255534C7FE9463) | [29](#sAFE12A5FB42CA917F8255534C7FE9463) |

| Item 16. | [Form 10-K Summary](#s185db7c120ce4bebafa04e8e024bfe0d) | [51](#s185db7c120ce4bebafa04e8e024bfe0d) |

10-K 1 dgx1231201610-k.htm 10-K

3 Giralda Farms

Madison, New Jersey 07940

Smaller reporting company

| | [General](#s6D6E020FF3543A781EB2E2AB2E8AA87F) | [23](#s6D6E020FF3543A781EB2E2AB2E8AA87F) |

| | [Regulation](#sEB3FB078AAA778A3BBC7E2AB2EDD512D) | [27](#sEB3FB078AAA778A3BBC7E2AB2EDD512D) |

Our executive offices are located in Secaucus, New Jersey.

| Lewisville, Texas (laboratory) | | Leased |

| Cleveland, Ohio (laboratory) | | Leased |

Our executive offices are located in Madison, New Jersey; in 2016, we announced that we plan to relocate our executive offices and corporate support functions to Secaucus, New Jersey in 2017.

Our common stock is listed and traded on the New York Stock Exchange under the symbol “DGX.” As of February 1, [removed: 2017,] [added: 2018,] we had approximately [removed: 2,800] [added: 2,700] record holders of our common stock; we believe that the number of beneficial holders of our common stock exceeds the number of record holders.

The table below sets forth the information with respect to purchases made by or on behalf of the Company of its common stock during the fourth quarter of [removed: 2016.][added: 2017.]

| Share Repurchase Program (A) | | [removed: —] [added: 41,965] | | | $ | [removed: —] [added: 95.32] | | | [removed: —] [added: 41,965] | | | $ | [removed: 532,116] [added: 1,013,116] | |

| (A) | Since the share repurchase program's inception in May 2003, our Board of Directors has authorized $8.0 billion of share repurchases of our common stock through December 31, [removed: 2016.] [added: 2017.] The share repurchase authority has no set expiration or termination date. |

Set forth below is a line graph comparing the cumulative total shareholder return on Quest Diagnostics' common stock since December 31, [removed: 2011] [added: 2012] based on the market price of the Company's common stock and assuming reinvestment of dividends, with the cumulative total shareholder return of companies on the Standard & Poor's 500 Stock Index and the S&P 500 Healthcare Equipment & Services Index.

[removed: ][added: ]

| 12/31/2013 | | $53.54 | | (6.24 | )% | | 32.39 | % | | 35.05 | % | | $ | [removed: 95.15] [added: 93.76] | | | $ | [removed: 153.57] [added: 132.39] | | | $ | [removed: 155.33] [added: 135.05] | |

| 12/31/2014 | | $67.06 | | 28.06 | % | | 13.69 | % | | 25.34 | % | | $ | [removed: 121.85] [added: 120.06] | | | $ | [removed: 174.60] [added: 150.51] | | | $ | [removed: 194.69] [added: 169.27] | |

| 12/31/2015 | | $71.14 | | 8.35 | % | | 1.38 | % | | 6.89 | % | | $ | [removed: 132.03] [added: 130.09] | | | $ | [removed: 177.01] [added: 152.59] | | | $ | [removed: 208.11] [added: 180.93] | |

| 12/30/2016 | | $91.90 | | 31.89 | % | | 11.96 | % | | (2.69 | )% | | $ | [removed: 174.14] [added: 171.58] | | | $ | [removed: 198.18] [added: 170.84] | | | $ | [removed: 202.51] [added: 176.06] | |

| 2017 | | | | | | | | | | | |

| First Quarter | $ | 100.00 | | | $ | 90.13 | | | $ | 0.45 | |

| Second Quarter | 111.87 | | | | 96.91 | | | | 0.45 | | |

| Third Quarter | 112.97 | | | | 91.67 | | | | 0.45 | | |

| Fourth Quarter | 102.62 | | | | 90.10 | | | | 0.45 | | |

In January 2018, we declared a common stock dividend of $0.50 per common share, payable in April 2018.

| October 1, 2017 – October 31, 2017 | | | | | | | | | | | | | | |

| Employee Transactions (B) | | 936 | | | $ | 91.20 | | | N/A | | | N/A | | |

| November 1, 2017 – November 30, 2017 | | | | | | | | | | | | | | |

| Share Repurchase Program (A) | | 860,463 | | | $ | 92.97 | | | 860,463 | | | $ | 933,116 | |

| Employee Transactions (B) | | 179 | | | $ | 93.75 | | | N/A | | | N/A | | |

| December 1, 2017 – December 31, 2017 | | | | | | | | | | | | | | |

| Share Repurchase Program (A) | | 162,496 | | | $ | 98.46 | | | 162,496 | | | $ | 917,117 | |

| Employee Transactions (B) | | 763 | | | $ | 96.15 | | | N/A | | | N/A | | |

| Share Repurchase Program (A) | | 1,064,924 | | | $ | 93.90 | | | 1,064,924 | | | $ | 917,117 | |

| Employee Transactions (B) | | 1,878 | | | $ | 93.45 | | | N/A | | | N/A | | |

| 12/29/2017 | | $98.49 | | 9.16 | % | | 21.83 | % | | 22.08 | % | | $ | 187.30 | | | $ | 208.14 | | | $ | 214.93 | |

| 2015 | | | | | | | | | | | |

| First Quarter | $ | 78.33 | | | $ | 66.09 | | | $ | 0.38 | |

| Second Quarter | 89.00 | | | | 69.47 | | | | 0.38 | | |

| Third Quarter | 75.25 | | | | 60.07 | | | | 0.38 | | |

| Fourth Quarter | 72.43 | | | | 60.15 | | | | 0.38 | | |

| October 1, 2016 – October 31, 2016 | | | | | | | | | | | | | | |

| Employee Transactions (B) | | 727 | | | $ | 83.97 | | | N/A | | | N/A | | |

| November 1, 2016 – November 30, 2016 | | | | | | | | | | | | | | |

| Share Repurchase Program (A) | | 488,007 | | | $ | 86.06 | | | 488,007 | | | $ | 490,119 | |

| Employee Transactions (B) | | 2,370 | | | $ | 85.02 | | | N/A | | | N/A | | |

| December 1, 2016 – December 31, 2016 | | | | | | | | | | | | | | |

| Share Repurchase Program (A) | | 1,196,549 | | | $ | 90.26 | | | 1,196,549 | | | $ | 1,382,116 | |

| Employee Transactions (B) | | 1,047 | | | $ | 88.04 | | | N/A | | | N/A | | |

| Share Repurchase Program (A) | | 1,684,556 | | | $ | 89.04 | | | 1,684,556 | | | $ | 1,382,116 | |

| Employee Transactions (B) | | 4,144 | | | $ | 85.60 | | | N/A | | | N/A | | |

| 12/31/2012 | | $58.27 | | 1.49 | % | | 16.00 | % | | 15.02 | % | | $ | 101.49 | | | $ | 116.00 | | | $ | 115.02 | |

| See page [removed: [52](#s1F1ABF38929A66DF89FCE2AB2614B7EF).] [added: [54](#s52CDBAB0613B7E12CB4D5534BF04A988).] |

[removed: Management's] Report [added: of Management] on Internal Control Over Financial Reporting

| See page [removed: [76](#s2860E3DC844E6EDEFC60E2AB34343276).] [added: [78](#sA198B98E4564FEACFF075534CD542552).] |

During the fourth quarter of [removed: 2016,] [added: 2017,] 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 [removed: reporting, except that on November 13, 2016 Optum360 LLC, a wholly owned subsidiary of UnitedHealth Group Incorporated (“Optum”) began to provide billing and related operations for the majority of the Company’s revenues pursuant to a multi-year agreement between Optum and the Company.][added: reporting.]

None.

On November 5, 2014, the Company announced that it was developing a new multi-year program designed to drive operational excellence and deliver total run-rate savings in the Company's cost structure of $1.3 billion (as compared to 2011) 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.

In early 2015, the Company developed a high-level estimate of the pre-tax charges expected to be incurred in connection with the program: $300 million.

During 2016 and 2015, the Company recorded charges in connection with courses of action undertaken in those years under the program; the charges in 2016 and 2015 were $63 million and $89 million, respectively.

On February 21, 2017, the Company developed a high-level estimate of the pre-tax charges expected to be incurred in connection with the course of action under the program for 2017; the estimate totaled $60 million to $80 million, consisting of up to $10 million of employee separation costs and $60 million to $70 million of systems conversion and integration costs.

All of

the total estimated pre-tax charges expected to be incurred in 2017 will result in cash expenditures.

The actual charges incurred in connection with the course of action in 2017 could be materially different from these estimates.

As detailed plans to implement the course of action are approved and executed, it will result in charges to earnings.

On February 20, 2017, Carrie Eglinton Manner, Senior Vice President, Advanced Diagnostics, became a Schedule B Participant in the Amended and Restated Quest Diagnostics Incorporated Executive Officer Severance Plan.

A copy of the Amended and Restated Quest Diagnostics Incorporated Executive Officer Severance Plan with updated Schedule B is attached as Exhibit 10.8 and is incorporated herein by reference.

Information regarding the Company's executive officers is contained in Part I, Item 1 of this Report under “Executive Officers of the Company.” Information regarding the directors and executive officers of the Company appearing in our Proxy Statement to be filed by April 30, [removed: 2017] [added: 2018] (“Proxy Statement”) under the captions “Proposal No. 1 - Election of Directors,” “Director Independence,” “Board Committees” and "Section 16(a) Beneficial Ownership Reporting Compliance" is incorporated by reference herein.

Information appearing in our Proxy Statement under the captions [removed: “2016] [added: “2017] Director Compensation Table,” “Compensation Discussion and Analysis,” “Information Regarding Executive Compensation” and “Compensation Committee Report” is incorporated by reference herein.

| [Report of Independent Registered Public Accounting [removed: Firm](#s40B4A35F5DB8F72605BEE2AB34665D97)] [added: Firm](#s437B753D002FE2826A925534CD86E83E)] | [F- [removed: 1](#s40B4A35F5DB8F72605BEE2AB34665D97)] [added: 1](#s437B753D002FE2826A925534CD86E83E)] |

| [Consolidated Balance [removed: Sheets](#sA70CA1388B9185FE7474E2AB1F8DC617)] [added: Sheets](#s67E5D065B695EDE2D3B15534B6AD9422)] | [F- [removed: 2](#sA70CA1388B9185FE7474E2AB1F8DC617)] [added: 3](#s67E5D065B695EDE2D3B15534B6AD9422)] |

| [Consolidated Statements of [removed: Operations](#sFD4600B3D55095615B82E2AB208CBC97)] [added: Operations](#s94AC28666C944107048A5534B6D3B073)] | [F- [removed: 3](#sFD4600B3D55095615B82E2AB208CBC97)] [added: 4](#s94AC28666C944107048A5534B6D3B073)] |

| [Consolidated Statements of Comprehensive [removed: Income](#s960A4267BB0476D10B24E2AB1F77A024)] [added: Income](#s0CF88C52562FAAF7A9BD5534B6F69270)] | [F- [removed: 4](#s960A4267BB0476D10B24E2AB1F77A024)] [added: 5](#s0CF88C52562FAAF7A9BD5534B6F69270)] |

| [Consolidated Statements of Cash [removed: Flows](#s340989FAF6F94A9CCBB4E2AB1F54FE67)] [added: Flows](#s3721FBCBBEDD740518D75534B701297E)] | [F- [removed: 5](#s340989FAF6F94A9CCBB4E2AB1F54FE67)] [added: 6](#s3721FBCBBEDD740518D75534B701297E)] |

| [Consolidated Statements of Stockholders' [removed: Equity](#s7591C77E9FC820B9BC72E2AB2187D587)] [added: Equity](#sDEEAB9C2036499911A725534B72E471F)] | [F- [removed: 6](#s7591C77E9FC820B9BC72E2AB2187D587)] [added: 7](#sDEEAB9C2036499911A725534B72E471F)] |

| [Notes to Consolidated Financial [removed: Statements](#s7C3594367BDBEC9496B3E2AB35FE6C30)] [added: Statements](#s5243A1885B7A7CA5C0365534CF15F9ED)] | [F- [removed: 7](#s7C3594367BDBEC9496B3E2AB35FE6C30)] [added: 8](#s5243A1885B7A7CA5C0365534CF15F9ED)] |

| [Supplementary Data: Quarterly Operating Results [removed: (unaudited)](#s7A47F4FA61E11FDCCAAAE2AB207B70B5)] [added: (unaudited)](#sBF6A8A645AA943809B165534BA311345)] | [F- [removed: 43](#s7A47F4FA61E11FDCCAAAE2AB207B70B5)] [added: 44](#sBF6A8A645AA943809B165534BA311345)] |

| [Schedule II - Valuation Accounts and [removed: Reserves](#s98AE70EBAEA812961F1AE2AB20AFE090)] [added: Reserves](#s5D7C61E20E6A74F05C3E5534BA74DA58)] | [F- [removed: 46](#s98AE70EBAEA812961F1AE2AB20AFE090)] [added: 46](#s5D7C61E20E6A74F05C3E5534BA74DA58)] |

| | |

| --- | --- |

Signatures

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 22, 2017.

| | | |

| --- | --- | --- |

| | QUEST DIAGNOSTICS INCORPORATED | |

| | (Registrant) | |

| | By: | /s/Stephen H. Rusckowski |

| | | Stephen H. Rusckowski |

| | | Chairman of the Board, President and Chief Executive Officer |

Each individual whose signature appears below constitutes and appoints Michael E.

Prevoznik and William J.

O'Shaughnessy, Jr., and each of them singly, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all the said attorneys-in-fact and agents or any of them or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 22, 2017.

| Signature | | Capacity |

| /s/Stephen H. Rusckowski Stephen H. Rusckowski | | Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) |

| /s/Mark J. Guinan Mark J. Guinan | | Executive Vice President and Chief Financial Officer (Principal Financial Officer) |

| /s/Robert A. Klug Robert A. Klug | | Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) |

| /s/Jenne K. Britell, Ph.D. Jenne K. Britell, Ph.D. | | Director |

| /s/Vicky B. Gregg Vicky B. Gregg | | Director |

| /s/Jeffrey M. Leiden, M.D., Ph. D. Jeffrey M. Leiden, M.D., Ph. D. | | Director |

| /s/Timothy L. Main Timothy L. Main | | Director |

| /s/Gary M. Pfeiffer Gary M. Pfeiffer | | Director |

| /s/Timothy M. Ring Timothy M. Ring | | Director |

| /s/Daniel C. Stanzione, Ph.D. Daniel C. Stanzione, Ph.D. | | Director |

| /s/Gail R. Wilensky, Ph.D. Gail R. Wilensky, Ph.D. | | Director |

| /s/John B. Ziegler John B. Ziegler | | Director |

SELECTED HISTORICAL FINANCIAL DATA OF OUR COMPANY

The following table summarizes selected historical financial data of our Company and our subsidiaries at the dates and for each of the periods presented.

We derived the selected historical financial data for the years 2012 through 2016 from the audited consolidated financial statements of our Company.

The selected historical financial data is only a summary and should be read together with the audited consolidated financial statements and related notes of our Company and management's discussion and analysis of financial condition and results of operations included elsewhere in this Annual Report on Form 10-K.

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | Year Ended December 31, | | | | | | | | | | | | | | | | | | |

| | 2016 | | | | 2015 | | | | 2014 | | | | 2013 | | | | 2012 | | |

| | (dollars in millions, except per share data) | | | | | | | | | | | | | | | | | | |

| Operations Data: | (a) (b) (c) | | | | (a) (d) (e) | | | | (a) (f) (g) | | | | (a) (h) (i) | | | | (a) (j) (k) | | |

| Net revenues | $ | 7,515 | | | $ | 7,493 | | | $ | 7,435 | | | $ | 7,146 | | | $ | 7,383 | |

| Operating income | 1,277 | | | | 1,399 | | | | 983 | | | | 1,475 | | | | 1,201 | | |

None.

Signatures

Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 23, 2018.

| | | |

| --- | --- | --- |

| | | |

| | QUEST DIAGNOSTICS INCORPORATED | |

| | (Registrant) | |

| | | |

| | By: | /s/Stephen H. Rusckowski |

| | | Stephen H. Rusckowski |

| | | Chairman of the Board, President and Chief Executive Officer |

Each individual whose signature appears below constitutes and appoints Michael E.

Prevoznik and William J.

O'Shaughnessy, Jr., and each of them singly, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K filed with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all the said attorneys-in-fact and agents or any of them or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on February 23, 2018.

| | | |

| --- | --- | --- |

| | | |

| Signature | | Capacity |

| /s/Stephen H. Rusckowski Stephen H. Rusckowski | | Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer) |

| | | |

| /s/Mark J. Guinan Mark J. Guinan | | Executive Vice President and Chief Financial Officer (Principal Financial Officer) |

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| /s/Robert A. Klug Robert A. Klug | | Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) |

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| /s/Jenne K. Britell, Ph.D. Jenne K. Britell, Ph.D. | | Director |

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| /s/Vicky B. Gregg Vicky B. Gregg | | Director |

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| /s/Jeffrey M. Leiden, M.D., Ph. D. Jeffrey M. Leiden, M.D., Ph. D. | | Director |

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| /s/Timothy L. Main Timothy L. Main | | Director |

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| /s/Gary M. Pfeiffer Gary M. Pfeiffer | | Director |

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| /s/Timothy M. Ring Timothy M. Ring | | Director |

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| /s/Daniel C. Stanzione, Ph.D. Daniel C. Stanzione, Ph.D. | | Director |

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