Quest Diagnostics 2010 Annual Report Download - page 102

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18. SUBSEQUENT EVENTS
In January 2011, the Company’s Board of Directors authorized $750 million of additional share repurchases,
bringing the total available under the share repurchase authorizations, which have no set expiration or termination
date, to $1 billion.
On January 31, 2011, the Company agreed to repurchase from SB Holdings Capital Inc., an affiliate of
GSK, approximately one-half of GSK’s ownership interest in the Company, or 15.4 million shares of the
Company’s common stock at a purchase price of $54.30 per share for $835 million (the “Repurchase”). The
Company funded the Repurchase, which closed on February 4, 2011, with $260 million of cash on-hand, $500
million of borrowings under its Secured Receivables Credit Facility and $75 million of borrowings under its
Credit Facility. Subsequent to the Repurchase, the Company’s remaining share repurchase authorization totaled
$165 million.
In a separate transaction on January 31, 2011, GSK agreed to sell in an underwritten offering to the public,
its remaining ownership interest in the Company, or 15.4 million shares of the Company’s common stock (the
“Offering”). The Company did not sell any shares of common stock in the Offering, which closed on February 4,
2011, and did not receive any of the proceeds. Subsequent to the Repurchase and the Offering, GSK no longer
beneficially owns any shares of Quest Diagnostics common stock.
19. SUMMARIZED FINANCIAL INFORMATION
The Company’s Senior Notes due 2011, Senior Notes due 2015, Senior Notes due 2017, Senior Notes due
2020, Senior Notes due 2037 and Senior Notes due 2040 are fully and unconditionally guaranteed, jointly and
severally, by the Subsidiary Guarantors. With the exception of Quest Diagnostics Receivables Incorporated (see
paragraph below), the non-guarantor subsidiaries are primarily foreign and less than wholly-owned subsidiaries.
In conjunction with the Company’s Secured Receivables Credit Facility, the Company maintains a wholly-
owned non-guarantor subsidiary, Quest Diagnostics Receivables Incorporated (“QDRI”). The Company and certain
of its Subsidiary Guarantors transfer certain domestic receivables to QDRI. QDRI utilizes the transferred
receivables to collateralize borrowings under the Company’s Secured Receivables Credit Facility. The Company
and the Subsidiary Guarantors provide collection services to QDRI. QDRI uses cash collections principally to
purchase new receivables from the Company and the Subsidiary Guarantors.
The following condensed consolidating financial data illustrates the composition of the combined guarantors.
Investments in subsidiaries are accounted for by the parent using the equity method for purposes of the
supplemental consolidating presentation. Earnings (losses) of subsidiaries are therefore reflected in the parent’s
investment accounts and earnings. The principal elimination entries relate to investments in subsidiaries and
intercompany balances and transactions.
F-36
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)