Quest Diagnostics 2008 Annual Report Download - page 96

Download and view the complete annual report

Please find page 96 of the 2008 Quest Diagnostics annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 128

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128

Long-term debt at December 31, 2008 and 2007 consisted of the following:
2008 2007
Industrial Revenue Bonds due September 2009.............................. $ 1,800 $ 3,585
Term Loan due December 2008 ............................................ - 60,000
Senior Notes due November 2010 . . ........................................ 399,724 399,574
Senior Notes due July 2011 ................................................ 274,724 274,613
Term Loan due May 2012 ................................................. 1,092,000 1,385,000
Senior Notes due November 2015 . . ........................................ 498,907 498,747
Senior Notes due July 2017 ................................................ 374,320 374,240
Senior Notes due July 2037 ................................................ 420,526 420,369
Debentures due June 2034 ................................................. 3,070 3,013
Other . . ................................................................... 18,160 21,652
Total ................................................................. 3,083,231 3,440,793
Less: current portion....................................................... 5,142 63,581
Total long-term debt . ................................................. $3,078,089 $3,377,212
Senior Unsecured Revolving Credit Facility
In May 2007, the Company entered into a $750 million senior unsecured revolving credit facility (the
“Credit Facility”) which replaced the Company’s $500 million senior unsecured revolving credit facility. The
Credit Facility matures in May 2012. Interest on the Credit Facility is based on certain published rates plus an
applicable margin that will vary over a range from 40 basis points to 125 basis points based on changes in the
Company’s public debt ratings. At the option of the Company, it may elect to enter into LIBOR-based interest
rate contracts for periods up to six months. Interest on any outstanding amounts not covered under LIBOR-based
interest rate contracts is based on an alternate base rate, which is calculated by reference to the prime rate or
federal funds rate. As of December 31, 2008 and 2007, the Company’s borrowing rate for LIBOR-based loans
under the Credit Facility was LIBOR (0.4% and 4.6% at December 31, 2008 and 2007, respectively) plus 0.40%.
The Credit Facility is guaranteed by certain of the Company’s domestic, wholly-owned subsidiaries (the
“Subsidiary Guarantors”). The Credit Facility contains various covenants, including the maintenance of certain
financial ratios, which could impact the Company’s ability to, among other things, incur additional indebtedness.
At December 31, 2008 and 2007, there were no outstanding borrowings under the Credit Facility.
The Company incurred $3.1 million of costs associated with the Credit Facility, which is being amortized
over the term of the related debt.
Secured Receivables Credit Facility
In June 2008, the Company amended its existing receivables securitization facility (the “Secured Receivables
Credit Facility”) and increased it from $375 million to $400 million. The Secured Receivables Credit Facility was
supported by back-up facilities provided on a committed basis by two banks: (a) $125 million, which matured on
December 13, 2008 and (b) $275 million, which originally matured on June 10, 2009.
In December 2008, the Company replaced the $125 million portion of the Secured Receivables Credit
Facility and amended the existing receivables securitization facility to increase it from $400 million to $500
million. The Secured Receivables Credit Facility continues to be supported by back-up facilities provided on a
committed basis by two banks: (a) $225 million, which matures on December 11, 2009 and (b) $275 million,
which also matures on December 11, 2009. Interest on the Secured Receivables Credit Facility is based on rates
that are intended to approximate commercial paper rates for highly-rated issuers.
At December 31, 2008 and 2007, the Company’s borrowing rate under the Secured Receivables Credit
Facility was 3.6% and 5.4%, respectively. Borrowings outstanding under the Secured Receivables Credit Facility
are classified as a current liability on the Company’s consolidated balance sheet. At December 31, 2008, there
were no borrowings outstanding under the facility. At December 31, 2007, borrowings under the facility totaled
$100 million.
F-24
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)