Quest Diagnostics 2011 Annual Report Download - page 110

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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-38
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)