Quest Diagnostics 2009 Annual Report Download - page 41

Download and view the complete annual report

Please find page 41 of the 2009 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 124

  • 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

(x) Difficulties and uncertainties in the discovery, development, regulatory environment and/or marketing of
new products or new uses of existing products.
(y) Failure to comply with the requirements of our Corporate Integrity Agreement that could subject us to
suspension or termination from participation in federal healthcare programs and substantial monetary
penalties.
Item 1B. Unresolved Staff Comments
There are no unresolved SEC comments that require disclosure.
Item 2. Properties
Our executive offices are located in Madison, New Jersey. We maintain clinical testing laboratories in major
metropolitan areas and elsewhere throughout the continental United States; in several instances a joint venture of
which we are a partner maintains the laboratory. We also maintain offices, data centers, billing centers, call
centers, an assembly center, distribution centers, patient service centers and a clinical trials testing laboratory at
locations throughout the United States. In addition, we maintain offices, manufacturing facilities, patient service
centers and clinical laboratories in locations outside the United States, including in Sweden, Puerto Rico, Mexico,
the United Kingdom, India, Ireland and Australia. Our properties that are not owned are leased on terms and for
durations that are reflective of commercial standards in the communities where these properties are located. We
believe that, in general, our facilities are suitable and adequate for our current and anticipated future levels of
operation and are adequately maintained. We believe that if we were unable to renew a lease on any of our
facilities, we could find alternative space at competitive market rates and relocate our operations to such new
location without material disruption to our business. Several of our principal facilities are highlighted below.
Location Leased or Owned
Cypress, California (laboratory) . . ..................... Leased
Los Angeles, California (laboratory) ................... Leased
San Juan Capistrano, California (laboratory) ........... Owned
Tampa, Florida (laboratory) ........................... Owned
Atlanta, Georgia (laboratory) .......................... Owned
Chicago, Illinois (2) (laboratories) ..................... One owned, one leased
Baltimore, Maryland (laboratory) . ..................... Owned
Teterboro, New Jersey (laboratory) .................... Owned
Philadelphia, Pennsylvania (laboratory) ................ Leased
Norristown, Pennsylvania (offices)..................... Leased
Dallas, Texas (laboratory)............................. Leased
Chantilly, Virginia (laboratory) . . . ..................... Leased
Item 3. Legal Proceedings
In addition to the matters described below, in the normal course of business, we have been named, from
time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation,
arising in connection with our activities as a provider of diagnostic testing, information and services. These legal
actions may include lawsuits alleging negligence or other similar legal claims. Certain of the actual or threatened
legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate
amounts of damages, and could have an adverse impact on our client base and reputation.
We are also involved, from time to time, in other reviews, investigations and proceedings by governmental
agencies regarding our business, including, among other matters, operational matters, certain of which may result
in adverse judgments, settlements, fines, penalties, injunctions or other relief. The number of these reviews,
investigations and proceedings has increased in recent years with regard to many firms in the healthcare services
industry, including our Company.
We maintain various liability insurance coverages for claims that could result from providing or failing to
provide clinical testing services, including inaccurate testing results, and other exposures. Our insurance coverage
limits our maximum exposure on individual claims; however, we are essentially self-insured for a significant
portion of these claims.
31