Quest DiagnosticsCorporate Social Responsibility Report

2011

At Quest Diagnostics, our goal is to make a difference in people’s lives. Every workday, our company helps more than a half million people make better healthcare decisions.

Making a difference in people’s lives extends far beyond our primary job of providing diagnostic insights. We also work hard to protect the environment, help our colleagues stay healthy, build a more diverse, inclusive workplace, and make significant, lasting impacts on the communities where we live and work.

As you will see in this report, serving others is a big part of who we are. I’m proud to be part of such a generous, caring organization, and I share my colleagues’ passion for creating stronger, healthier communities inside the workplace and out.

I am excited about the future.

Regards,

Steve RusckowskiPresident and CEO

A message from Steve Rusckowski, President and CEO

 

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Each year, our company and our people make significant contributions in the areas of community volunteerism, employee wellness, and environmental conservation, as well as diversity and inclusion, through our QuestCares, HealthyQuest, GreenQuest, and Diversity and Inclusion initiatives. The success of these programs and the depth of their impact illustrate our commitment to our employees, our communities, and the environment.

In 2011, we sought to increase our involvement in community outreach and engagement. Our employees partnered with local and national organizations to help the environment and their fellow citizens. We made notable progress, and will continue to engage more of our employees to make a difference in the years ahead.

Quest Diagnostics and our employees donated $1.5 million to charities, and provided $29 million in free and reduced-price testing services through our patient assistance programs. We also donated more than 1,000 pints of blood, collected $17,000 worth of food items for homeless shelters and supported disaster relief efforts in the U.S. and Japan.

Our GreenQuest teams continued their strategic efforts to reduce our carbon footprint through facility projects and overall fleet changes. As a result, we were ranked 118 out of 500 companies by Newsweek’s Green Rankings and recognized by the U.S. Department of Energy’s Clean Cities Coalition, which awarded us a 4-Star Evergreen Fleet re-certification.

We strengthened our HealthyQuest employee wellness initiative and our Diversity and Inclusion programs. Blueprint for Wellness®, our health risk assessment service, reached a record 72 percent employee participation. Our formal mentoring and Women in Leadership programs resulted in more than 90 partnerships between senior leaders and employees to nurture our culture of diversity and leadership.

The stories and data in these pages demonstrate the strides we’ve made and confirm our belief that when we lead with our greatest assets, our testing and our passionate people, we can positively impact the communities we serve.

In the spirit of giving,

Laure E ParkExecutive Director, Prescription Drug Monitoring and Corporate Citizenship Officer

Reflections on 2011A message from Laure Park, Corporate Citizenship Officer

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2011 Corporate Social Responsibility

Our QuestCares program touches the lives of hundreds of thousands of people across the country. Our employees bring a deep level of compassion and care in serving others, to improve their personal health and to make a lasting, meaningful impact on the communities where we live and work.

In 2011, Quest Diagnostics and its employees gave $1.5 million to charities, including more than $450,000 to the American Cancer Society (the Society), our employee-elected national charity through 2013.

We were an American Cancer Society 2011 Choose You® national program sponsor, encouraging women everywhere to take care of themselves by getting regular health checks, with posters in our Patient Service Centers and through national employee education events. We supported the Society’s Cancer Prevention Study-3 (CPS-3), a national longitudinal study that focuses on uncovering the lifestyle, environmental and genetic factors that influence cancer risk. In 2011 alone, 22,779 enrolled in the study, and we are working to support the Society in reaching its goal to engage 300,000 Americans by 2013.

Throughout 2011, Quest Diagnostics employees and their families also walked to support the Society in their annual Relay for Life® and Making Strides Against Breast Cancer® events, with more than 90 teams at walks across the country.

In addition, we provided $29 million in free and reduced-price testing services through our patient assistance programs. Locally, our people helped donate more than 1,000 pints of blood and $17,000 worth of food items to shelters and food pantries.

In the face of several natural disasters in the Midwest and Japan, our QuestCares teams were there to provide support through donations on a national level, and gathered supplies through drives on a local level.

QuestCares

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Donating EHR software and licensing to local communities in need

The U.S. Department of Health and Human Services’ (HHS) Office of Minority Health and Quest Diagnostics launched an initiative to donate electronic health record (EHR) software and services to physicians in small practices serving minority populations in Houston, Texas, to foster broader use of EHRs and reduce health disparities affecting minorities.

Quest Diagnostics donated approximately 75 Care360 EHR licenses, including subscription costs, and helped integrate technology within participating physician practices. We also donated approximately 85 percent of the cost of health pro-vider EHR licenses, program integration, monthly subscription fees, and education and training.*

Other partners in this effort included the National Health Information Technology Collaborative for the Underserved, a Washington, D.C.-based public, private and community partner-ship that supports the effective use of health information in underserved popu-lations with emphasis on communities of color; the Healthcare & Information Management Systems Society Latino Initiative Workgroup; and Medic Success, a New Jersey company that promotes health-related solutions for underserved communities.

* Since 2006, an exception to the Federal Stark Law and Anti-Kickback Statute has permitted donation of certain EHR arrangements but requires recipients to pay 15 percent of donor costs.

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Partnering with our local communities to help abroad

Dennis Hogle, Director of Field Operations in southern California has always been committed to his community, volunteering with his church locally and abroad.

In a fateful tale of friendship, his personal trainer, Tchicaya Missamou, turned out to be just as passionate about giving back. Tchicaya serves as president and founder of the Hope for Congo Foundation, a non-profit that helps children in underserved Congolese areas in Africa by supporting basic needs. The foundation was working with local hospitals and labs to collect medical supplies. Dennis saw an opportunity to engage our company and help give back.

Dennis worked with various departments at Quest Diagnostics to organize a large donation of pandemic items and lab equipment, enough to fill three shipping containers. Our company transported the donations across the country so that they could be shipped to the Congo with other supplies. In total we donated approximately $600,000 worth of equipment.

Dennis Hogle and Tchicaya Missamou with the medical supplies and equipment donated by Quest Diagnostics to the Hope for Congo Foundation.

HealthyQuestHealthyQuest, our wellness initiative, continues to foster a “culture of health” throughout Quest Diagnostics. We’ve been engaging employees and their dependents for seven years and 2011 marked a milestone in our wellness screening participation with a record 72 percent of employees choosing to get screened. This award-winning initiative contin-ues to empower employees and their dependents to become accountable for their health.

Around the country, HealthyQuest leaders promote healthy life choices while coordinat-ing programs to drive wellness. HealthyQuest has three components: Personal health literacy, such as our Blueprint for Wellness® service; lifestyle change programs that pro-mote health through modifications in behaviors, such as our tobacco cessation program; and institutional changes in the work environment, such as on-site fitness centers and offering healthy food options.

More than 38,000 employees and spouses/domestic partners participated in Blueprint for Wellness, which includes a health and lifestyle questionnaire, height, weight, and blood pressure, and more than 30 laboratory tests. Blueprint for Wellness allows participants to identify and measure their health risks, aid in the early detection of common medical conditions, and map out necessary actions to improve their health and quality of life.

Offering our InSure® FIT™ colorectal cancer screening program for the fifth consecutive year contributed to our higher than national averages for compliance for colorectal cancer screening. Our 100 percent subsidized tobacco cessation program had another year of increased enrollment, contributing to our continued decline in the number of tobacco users, now at 10.5 percent, compared to the national average of 20 percent.

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2011 Corporate Social Responsibility

Partnering with employees to improve their health

Our local Health Promotion Teams are key to helping us achieve our health and productivity objectives. These employee volunteers come together to create a healthier workforce through develop-ment, deployment, and measurement of health, wellness, and fitness initiatives.

Each year, a “HealthyQuest” award is presented to the location that achieves certain targets, such as participation in the annual Blueprint for Wellness risk assessment, the improvement in rec-ommended cancer screening compliance rates, and a reduction in the number of tobacco users. The Health Promotion teams create and execute their local strategy to compete for this annual honor.

Our National Revenue Service Center, based in Norristown, Pennsylvania, received the “HealthyQuest” award for their efforts in 2011. The active Health Promotion team has had significant impact on the employee base.

Amanda Schantz and Tina Testa lost more than 100 pounds each by changing their eating habits and utilizing their business unit’s fit-ness center. Amanda took the path of becoming a vegetarian after seeing and feeling the difference a healthier diet made in her life, while Tina chose to engage a nutritionist and exercise physiologist.

Catherine Green and Gina Thompson joined Weight Watchers® to learn how to eat responsibly for their bodies. Catherine also used the on-site fitness center to manage workouts and her busy schedule. They each lost more than 30 pounds and have maintained their new lifestyle.

After being alerted to his health risks through Blueprint for Wellness, Johnathan Ronnan started working out with his wife on a daily regimen of workout videos. Today, Johnathan has lost 50 pounds, and continues to be active.

Regional awards

In 2011, our Philadelphia; Baltimore; Chantilly, Virginia and Rocky Mountains business units earned regional recognition for their commitments to employee health.

“We are honored to be recognized as a company that is committed to the health and wellness of our employees and their loved ones,” said David Norgard, Vice President of Human Resources. “I am proud of all our employees who have made a dedicated effort to take the tools we provide, such as our Blueprint for Wellness program, and use them to improve their well-being.”

CEO Cancer Gold Standard™ Accreditation

This accreditation is awarded to companies committed to fighting cancer by empower-ing their workforce to make

healthy lifestyle choices to reduce their risk of getting cancer, as well as offering early detection initiatives and quality care for those impacted by this disease. Since earning the CEO Roundtable on Cancer Gold Standard accreditation in 2009, Quest Diagnostics continues to bring its commitment to the fight against cancer in the form of programs supporting our own employees. We play a leadership role in the best practice group in the Northeast, and continue to mentor and encourage other organi-zations to join the fight against cancer. In 2011, four additional New Jersey-based organizations joined the CEO Roundtable on Cancer with the support of Quest Diagnostics.

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Five employees at our National Revenue Service Center collectively lost more than 300 pounds, taking advantage of their local HealthyQuest program.

Baltimore employees planted vegetables in their HealthyQuest on-site garden.

2011 Corporate Social Responsibility

In its fourth year, our GreenQuest initiative continues to research innovative ways to reduce our footprint and help the environment.

In 2011, Quest Diagnostics invested approximately $700,000 in projects and modifications to reduce energy consumption and waste while conserving resources. Sixty-five percent of projects targeted electricity conservation, resulting in an overall 2.0 percent reduction in electrical use. Our efforts to purchase more fuel-efficient vehicles and make routes more efficient led to a 2.0 percent reduction in fuel consumption in 2011, and a cumulative 18.7 percent reduction in gasoline consumption since 2007.

GreenQuest

Quest Diagnostics business units around the country look for simple and innovative ways to reduce energy consumption and waste production. The Pittsburgh business unit identified areas of the building where lights and heating/cooling equipment stayed on after work hours. Departments like billing, finance, administration and warehouse were typically vacant at night and on weekends. The facilities department took advantage of their building management software to program lights and the heating/cooling system to shut down when those areas were unoccupied, reducing their power use by approximately 88 hours per week.

The result was a reduction in electrical consumption of more than 277,000 kilowatt hours and an annual cost savings of nearly $28,000. The environmental benefit of this project was a reduction of 16.7 metric tons of CO2 released to the atmosphere.

“Sometimes the tools to protect the environment are already at your fingertips. This project cost virtually nothing because the software was in place. It had a low cost and a great environmental return, which is why it was selected as the best ‘GreenQuest’ project in 2011. Every business unit will evaluate their facility for similar opportunities,” said Clete Lewis, Director, Corporate Environmental Health and Safety.

Using technology to improve our environment

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Our green fleet

Our company’s ongoing commitment to the environment has been recognized for the second consecutive year by the Puget Sound Clean Air Agency, an organization within the U.S. Department of Energy’s Clean Cities Coalition, which awarded us a 4-Star Evergreen Fleet re-certification for 2011.

Our continued effort to develop green fleet policies, select more fuel efficient vehicles and optimize our routes for improved efficiency contributed to our certifica-tion. The agency recognized our documented fuel savings of more than 202,000 gallons in 2010, a 2.7 percent reduction from 2009 consumption. This avoided more than 3,500 metric tons of CO2 emissions to the atmosphere and also lowered our overall operations costs.

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“The continued search to improve efficiencies in our Logistics system represents one aspect of our overall approach to environmental sustainability—the effort we call GreenQuest.” said Clete Lewis, Director, Environment, Health and Safety. “We can’t become a completely ‘green’ company overnight, but we can pledge to continually look for opportu-nities to improve.”

Some locations such as our Oklahoma joint venture, Diagnostic Laboratory of Oklahoma, are investigating alternative fuel vehicles as a potential next step to environ-mental sustainability. Their six compressed natural gas (CNG) automobiles are proving to be a beneficial addition to their fleet.

Newsweek Ranking

Quest Diagnostics was recently named to Newsweek’s annual Green Rankings, placing number 118 on the U.S. 500 list with a green score of 58.3, up from number 358 in 2010.

“We accomplished an amazing feat by climbing 240 spots to place 118 on the U.S. 500 list,” said David Norgard, Vice President, Human Resources. “We have made a commitment through our GreenQuest program to improve our environmental impact and carbon footprint. Our Green Teams across the company have made a tremendous effort in making sure this is accomplished, and this recogni-tion is something they should all be very proud of.”

Now in its third year, Newsweek’s Green Rankings highlight organiza-tions that are leading in environmental performance. The data —calculated in cooperation with Trucost and Sustain-alytics, two leading environmental- research firms—assesses environmen-tal impact, as well as environmental management and disclosure.

In an effort to reduce fuel consumption and air pollution, Quest Diagnostics moved to using more fuel-efficient vehicles.

2011 Corporate Social Responsibility

Inclusion/DiversityOur employees, like our patients, are an integral part of our success and community impact. We continually strive to develop and engage leadership in our workforce.

This year, we continued our commitment to recognizing the contributions and talents of all of our employees and to providing opportunity without regard to race, color, religion, sex, age, national origin, disability, veteran status, sexual orientation or any other status protected by state or local law.

In 2011, the number of female senior vice presidents increased to 50 percent of the total; one-third of top managers and 64 percent of junior managers are women. More than 68 percent of our workforce is female, and women hold 47 percent of total management positions.

Our IntelliQuest learning and development platform provides opportunities for career development through formal and informal mentoring as well as training and educational programs.

Since its inception, our formal mentoring program has included more than 90 mentoring partnerships that foster a culture of diversity and leadership. Pairing employees with senior-level mentors, we invest in building their full potential and creating leaders at all levels who are passionate about what they do and who they help. Our informal mentoring program creates relationships and reciprocal learning opportunities for employees at all levels of our company.

Employees who mentor other employees show a willingness to share knowledge, experience, and successes. The development of future leaders is part of our company’s goals to create a diverse leadership pipeline and a dynamic and inquisitive culture based on sharing knowledge and ideas across our company.

Through the IntelliQuest platform, our people are able to maintain the skills needed for their jobs and develop new skills. This year, our people invested more than 36,000 hours in continuing education through a variety of courses. We also provided $1.4 million in educational reimbursements for employees seeking higher education.

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Women in Leadership

The Quest Diagnostics Women in Leadership (WIL) initiative expanded its reach across the company. WIL is also a driving force in the development of informal mentoring partnerships to reach a broader audience and create a diverse support network of leaders across all arms of business.

WIL builds awareness by reaching out locally to educate and engage employ-ees across the country and setting the groundwork for local WIL chapters. In addition to the local chapters, WIL has established Networking, Grassroots, Mentoring and Leadership teams, each tasked with establishing content and tools to help achieve WIL’s goals and objectives for the year. WIL members at each of the chapters will have the opportunity to volunteer to support these functions on a local level.

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Senior leaders share their experiences at a WIL conference.

2011 Corporate Social Responsibility

2011 Data

Economic and Business Performance:

2011 2010 2009

Revenue ($ millions) $ 7,510 $ 7,369 $ 7,455

Operating Income ($ millions) $ 995 $ 1,295 $ 1,359

Operating Income as % of revenue 13.2% 17.6% 18.2%

Net income from continuous operations ($ millions) $ 472 $ 723 $ 730

Earnings per share from continuing operations $ 2.93 $ 4.06 $ 3.88

Cash flow from operating activities ($ millions) $ 895 $ 1,118 $ 997

Patient encounters (millions) 146 146 148

Dividend per share $0.47 $ 0.40 $ 0.40 Total shareholder return – Quest Diagnostics (Dec. 31st) 8.33% -9.9% 17.2%

Total shareholder return – S&P 500 for comparison (Dec. 31st) 2.1% 15.1% 26.5%

Forbes: The Global 2000 ranking 1,066 891 731

Fortune 500 ranking 341 320 303

Barron’s 500 ranking 404 400 160

Our Commitment to Our Communities:

2011 2010 2009

Charitable giving ($ thousands) $ 1,500 $ 1,300 $ 1,300

In-kind giving (Patient Assistance Programs) $29,000 $20,800 $ 13,600 ($ thousands)

Foundation grants ($ thousands) $ 25 $ 66 $ 103

Food items donated ($ thousands) $ 17 $ 17 $ 18

Pints of blood donated 1,055 1,020 1,057

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Our Commitment to the Environment:

2011 2010 2009

Square footage of facilities (millions) 6.067 6.064 5.856

Indirect energy consumption (TJ) 970 990 1,017

Direct energy consumption (TJ) 1,358 1,302 1,335

Scope 1 CO2 emissions (metric tons) 88,791 83,093 87,994

Scope 2 CO2 emissions (metric tons) 176,518 166,507 172,202

Scope 3 CO2 emissions (metric tons) 40,611 27,483 27,050

Water consumption (cubic meters) 835,692 852,946 875,864

Chemical waste (metric tons) 1,959 1,980 1,845

General waste (metric tons) 7,854 8,012 8,765

Recyclable waste (metric tons) 7,760 9,697 7,991

Biohazardous waste (metric tons) 7,996 8,505 8,662

Our Commitment to our Employees:

2011 2010 2009

Number of employees 41,500 42,000 43,000

Turnover rate 14% 13% 12%

Educational reimbursements ($ millions) $4.0 $4.3 $4.1

Diversity:

Percent of women in workforce 68% 68% 68%

Percent of women in management positions 47% 50% 51%

Percent of minorities in total work force 49% 50% 48%

Percent of minorities in management positions 21% 20% 18%

Health and Wellness:

Percent participating in Wellness Screenings 72% 70% 70%

Injuries per 100 full time employees 1.71 1.67 1.66

Lost days per 100 full time employees 16.59 11.24 N.A.

Cases of lost days per 100 full time employees 0.43 0.43 N.A.

National Business Group Best Employer for Healthy Lifestyle Award Platinum Platinum Platinum

Cancer Gold Standard, CEO Roundtable on Cancer Accreditation

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Locations Awarded as Best Places to Work:

2011 2010 2009

Atlanta, Georgia

Auburn Hills, Michigan

Chicago, Illinois

Collegeville, Pennsylvania

ComputerWorld’s Top 100 Best Places to Work in IT

Diagnostic Laboratory of Oklahoma

Florida

Focus Diagnostics (Cypress, California)

Horsham, Pennsylvania

Las Vegas, Nevada

New York/New Jersey

Nichols Institute Chantilly, Virginia

Nichols Institute San Juan Capistrano, California

Nichols Institute Valencia, California

Pacific Northwest (San Jose, California)

Pittsburgh, Pennsylvania

Rocky Mountains, Colorado

Texas Gulf Coast (Texas and Louisiana)

Twinsburg, Ohio

United Kingdom

West Norriton, Pennsylvania

QuestDiagnostics.comQuest, Quest Diagnostics, any associated logos, and all associated Quest Diagnostics registered or unregistered trademarks are the property of Quest Diagnostics. All third party marks - ® and ™ - are the property of their respective owners. © 2011 Quest Diagnostics Incorporated. All rights reserved.

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