PART II

Item 5. Market for Registrant’s Common Stock, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is listed and traded on the New York Stock Exchange under the symbol “DGX”. The following table sets forth, for the periods indicated, the high and low sales price per share as reported on the New York Stock Exchange Consolidated Tape:

As of February 23, 2004, we had approximately 5,900 record holders of our common stock.  

On October 21, 2003, we declared a quarterly cash dividend of $.15 per common share, payable on January 23, 2004 to holders of record on January 8, 2004. On February 19, 2004, we declared a quarterly cash dividend of $.15 per common share, payable on April 21, 2004 to holders of record on April 7, 2004. Prior to October 2003, we had not previously declared or paid cash dividends on our common stock. We expect to fund future dividend payments with cash flows from operations, and do not expect the dividend to have a material impact on our ability to finance future growth.

In May 2003, our Board of Directors authorized a share repurchase program, which permits us to purchase up to $300 million of our common stock. In October 2003, our Board of Directors increased the share repurchase authorization by an additional $300 million. Through December 31, 2003, we repurchased approximately 4 million shares of our common stock at an average price of $64.54 per share for a total of $258 million.

Item 6. Selected Financial Data

See page 34.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

See page 36.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

See Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 8. Financial Statements and Supplementary Data

See Item 15 (a) 1 and 2.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

(a)          Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are adequate and effective.

(b)          During the quarter ended December 31, 2003, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.