Quest Diagnostics 2000 Annual Report Download - page 51

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31
(j) Includes the payment of Damon and other billing related settlements totaling approximately $144 million and the settlement of
amounts owed to Corning Incorporated of $45 million.
(k) Includes a fourth quarter charge of $5.3 million, which was part of the $6.8 million charge recorded in the same quarter, to
increase the provision for doubtful accounts to recognize the reduced recoverability of certain receivables from accounts which
will no longer be served as a result of our consolidation plan announced in the fourth quarter of 1997.
(l) Adjusted EBITDA represents income (loss) before extraordinary loss, income taxes, net interest expense, depreciation,
amortization and special items. Special items include the provisions for restructuring and other special charges reflected in the
selected historical financial data above, $8.9 million of costs related to the integration of SBCL which were included in operating
costs and expensed as incurred in 2000, a $3.0 million gain related to the sale of an investment in 1999 and charges of $2.5
million and $6.8 million recorded in selling, general and administrative expenses in 1998 and 1997, respectively, related to the
Company’s consolidation of its laboratory network announced in the fourth quarter of 1997. Adjusted EBITDA is presented and
discussed because management believes that Adjusted EBITDA is a useful adjunct to net income and other measurements under
accounting principles generally accepted in the United States since it is a meaningful measure of a company’s performance and
ability to meet its future debt service requirements, fund capital expenditures and meet working capital requirements. Adjusted
EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States and
should not be considered as an alternative to (i) net income (or any other measure of performance under generally accepted
accounting principles) as a measure of performance or (ii) cash flows from operating, investing or financing activities as an
indicator of cash flows or as a measure of liquidity.