Quest Diagnostics 2000 Annual Report Download - page 4

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2000 was a tremendous year for our company. We had excellent financial results and built the
foundation for exceptional performance in the future.
Giving Results There has never been a better time to be the clear leader in the diagnostic testing
business. Our industry accounts for about 4% of health care spending in the United States, yet we
drive more than 70% of health care decisions. We play an essential role in disease screening and
diagnosis, and help physicians and patients manage the treatment of disease. The vital work we do is
all about giving results— laboratory test results, information derived from those results, and valuable
health care insights — results that drive treatment decisions to improve the health of people.
Getting Results Today Giving results — and getting results. Our financial performance during
2000 reflected the outstanding efforts of our dedicated employees. I am pleased to report record
revenues and record profits. Revenues were $3.4 billion, compared to $2.2 billion in 1999, and net
income before special items was $106.2 million, compared to $41.2 million in 1999. Adjusted
EBITDA, a measure of cash flow excluding non-recurring items, was $459.4 million, compared to
$237 million in 1999. Earnings and adjusted EBITDA before special charges have increased every
quarter for the last four years. These results have not gone unnoticed by investors, as our market
value grew dramatically during the year.
During the year we made significant progress integrating the former SmithKline Beecham Clinical
Laboratories (SBCL), which we acquired in August, 1999. We have nearly completed the combina-
tion of our large laboratory networks while growing our volume and revenues per requisition at the
same time — something that had never been done in our industry. Beyond integration we have
begun standardizing our processes and systems, which will make it easier to do business with us,
and improve quality and service for customers.
We also demonstrated that improved patient access and strong service create a value proposition
our customers appreciate. By offering so much more than testing alone, we restructured several
contracts with leading managed care organizations to ensure more appropriate reimbursement.
Today, we provide the broadest access to diagnostic testing services through our network of full-service
laboratories, rapid response labs and conveniently located patient service centers across the United
States and in Mexico and the United Kingdom. Nichols Institute, our world-renowned specialty-testing
laboratory and research and development center, is a leader in the fields of endocrinology, genetics,
immune system disorders, infectious diseases, metabolism and molecular microbiology.
Our values are the foundation of Quest Diagnostics: Quality, Integrity, Innovation, Accountability,
Collaboration and Leadership. In our line of work, where we impact the lives of more than 400,000
people every day, we have an obligation to hold ourselves to the highest standards. We base our
management approach on these six core values which provide a straightforward guide to expected
behavior in which the patient comes first in everything we do. On the pages that follow, the stories of
several of our stakeholders illustrate how we bring these values to life each and every day.
To Our Shareholders, Customers and Employees:
Kenneth W. Freeman
Chairman and Chief Executive Officer
00999897
Net Revenues
($ billions)
1.5 1.5
2.2
3.4