Quest Diagnostics Incorporated

Welcome to the Quest Diagnostics fourth quarter and full year 2021 conference call. At the request of this company, the call is being recorded. The entire contents of the call, including the presentation and the question and answer session that will follow are copyrighted property of Quest Diagnostics with all rights reserved. Any redistribution, retransmission, or rebroadcast of this call in any form without written consent of Quest Diagnostics is strictly prohibited. Now I'd like to introduce Sean Beavik, Vice President of Investor Relations for Quest Diagnostics. Go ahead, please. Thank you, and good morning.

I'm joined by Steve Roskowski, our Chairman, Chief Executive Officer and President, Mark Guinan, our Chief Financial Officer, and Jim Davis, our Executive Vice President, General Diagnostics, and Chief Executive Officer-Elect. During this call, we may make forward-looking statements, and we'll discuss non-GAAP measures. We provide a reconciliation of non-GAAP measures to comparable GAAP measures in the tables to our earnings press release. Actual results may differ materially from those projected. Risks and uncertainties, including the impact of the COVID-19 pandemic that may affect Quest Diagnostics' future results include, but are not limited to, those described in our most recent annual report on Form 10-K, and subsequently filed quarterly reports on Form 10-Q, and current reports on Form 8K. The company continues to believe that the impact of the COVID-19 pandemic on future operating results, cash flows, and or its financial condition will be primarily driven by the pandemic's severity and duration, healthcare insurer, government, and clients' payer reimbursement rates for COVID-19 molecular tests, the pandemic's impact on the U.S. healthcare system and U.S. economy, and the timing, scope, and effectiveness of federal, state, and local governmental responses to the pandemic, including the impact of vaccination efforts which are drivers beyond the company's knowledge and control. For this call, references to reported EPS refer to reported diluted EPS, and references to adjusted EPS refer to adjusted diluted EPS. Any references to business, testing, revenues, or volumes refer to the performance of our business excluding COVID-19 testing. Growth rates associated with our long-term outlook projections, including total revenue growth, revenue growth from acquisitions, organic revenue growth, and adjusted earnings growth are compound annual growth rates. Finally, revenue growth rates from acquisitions will be measured against our base business. Now, here is Steve Ruskowski.

Thanks, Sean, and thanks, everyone, for joining us today. Over the past two years, our 50,000 Quest employees have risen to the challenge of COVID-19, innovating, persevering, in remaining committed to the patients and customers we serve. While doing so, they also grew our base business by more than 19% in 2021, achieving record levels. I'm extremely proud of what we have accomplished as a team. So we have a lot of news to cover this morning, and I want to get into that so we can have your questions. So let's get started. So first, I'll start by sharing some color on the leadership transition we've announced this morning. Then we'll review our performance for the fourth quarter and the full year of 2021. And then finally, Mark will provide more detail on our financial results and talk about our financial outlook for 2022. So as you have seen in our announcement this morning, we've begun implementing a gradual leadership succession plan under which Jim Davis, Executive Vice President of General Diagnostics, will succeed me to become Chief Executive Officer on November 1, 2022. At that time, I will continue to serve on the Quest Board of Directors as Executive Chairman. Quest Diagnostics is a great company that is well-positioned to continue to deliver shareholder value. As I approached a decade in the role, the board and I determined that now is the right time to begin to turn over the helm to a new leader. Jim Davis is extremely well qualified to be CEO, having managed a large part of this company's role as Executive Vice President. He has deep knowledge of Quest, the healthcare industry, and the corporate world, gained through more than 35 years of business experience. Jim is widely respected and will be a strong CEO. You know, when I took this role nearly 10 years ago, Quest was not growing nor realizing its potential. We launched a new strategy, our new Quest, to drive transformational change. To drive that change, we built a new leadership team, and Jim has been a key member of that team. We built a business strategy to accelerate growth and drive operational excellence. To drive growth, we focused on improving relationships with health plans and hospital health systems and expanding fast-growing businesses and advanced diagnostics and consumer testing. In addition, we've added about 2% revenue growth on average through accretive, strategically aligned acquisitions over the last several years. We have driven operational excellence, and our Invigorate program has consistently improved quality and customer experience while generating 3% productivity each year. And we've made more inclusive by increasing the diversity on our board and amongst our management ranks. Finally, we established Quest for Health Equity in 2020, over $100 million committed to reduce health care disparities among underserved in the United States, particularly in communities of color. I am very proud of what we have accomplished together, and if you consider the opportunities in front of us, in many ways we're just getting started. We have a strong team, and Jim has been a key leader in our transformation. He runs our general diagnostics business, which accounts for more than 80% of revenues, and three quarters of our employees. He manages operations, including sales and marketing, patient services, logistics, laboratories, billing, and customer services. He also oversees the drive operational excellence strategy, which includes our Vigorate program. He has provided enterprise oversight, for a pandemic response. And if that wasn't enough, he's also led the development of Quest ESG strategy. So Jim, congratulations. I look forward to working very closely with you through this transition. Hey, thanks, Steve.