Quest Diagnostics 2011 Annual Report Download - page 70

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Share Repurchases
In January 2012, our Board of Directors authorized $1.0 billion of additional share repurchases of our
common stock, increasing our total available authorization at that time to $1.1 billion. The share repurchase
authorization has no set expiration or termination date.
For the year ended December 31, 2011, we repurchased 17.3 million shares of our common stock at an
average price of $54.05 per share for a total of $935 million, including 15.4 million shares purchased in the first
quarter from SB Holdings Capital Inc., a wholly-owned subsidiary of GlaxoSmithKline plc., at an average price
of $54.30 per share for a total of $835 million. At December 31, 2011, $65 million remained available under the
share repurchase authorization.
For the year ended December 31, 2010, we repurchased 14.7 million shares of our common stock at an
average price of $51.04 per share for $750 million, including 4.5 million shares purchased in the first quarter at
an average price of $56.21 per share for $251 million under an accelerated share repurchase transaction with a
bank.
Contractual Obligations and Commitments
The following table summarizes certain of our contractual obligations as of December 31, 2011:
Contractual Obligations Total
Less than
1 year 1–3 years 3–5 years
After
5 years
(in thousands)
Payments due by period
Outstanding debt . . ............................ $3,945,000 $ 645,000 $200,000 $ 800,000 $2,300,000
Capital lease obligations ....................... 47,187 9,395 17,324 7,616 12,852
Interest payments on outstanding debt .......... 2,157,040 157,861 308,369 273,739 1,417,071
Operating leases. . . ............................ 638,507 174,496 228,593 118,851 116,567
Purchase obligations ........................... 69,758 31,178 31,932 4,420 2,228
Merger consideration obligation ................ 1,045 1,045 — — —
Total contractual obligations ................... $6,858,537 $1,018,975 $786,218 $1,204,626 $3,848,718
Interest payments on our long-term debt have been calculated after giving effect to our interest rate swap
agreements, using the interest rates as of December 31, 2011 applied to the December 31, 2011 balances, which
are assumed to remain outstanding through their maturity dates.
A full description of the terms of our indebtedness and related debt service requirements and our future
payments under certain of our contractual obligations is contained in Note 11 to the Consolidated Financial
Statements. A full discussion and analysis regarding our minimum rental commitments under noncancelable
operating leases and noncancelable commitments to purchase product or services at December 31, 2011 is
contained in Note 16 to the Consolidated Financial Statements. See Note 4 to the Consolidated Financial
Statements for a discussion with respect to the remaining merger consideration related to shares of Celera which
had not been surrendered as of December 31, 2011.
As of December 31, 2011, our total liabilities associated with unrecognized tax benefits were approximately
$195 million, which were excluded from the table above. We believe it is reasonably possible that these
liabilities may decrease by up to $17 million within the next twelve months, primarily as a result of the
expiration of statutes of limitations, settlements and/or the conclusion of tax examinations on certain tax
positions. For the remainder, we cannot make reasonably reliable estimates of the timing of the future payments
of these liabilities. See Note 6 to the Consolidated Financial Statements for information regarding our contingent
tax liability reserves.
Our credit agreements and our term loan due May 2012 contain various covenants and conditions, including
the maintenance of certain financial ratios, that could impact our ability to, among other things, incur additional
indebtedness. As of December 31, 2011, we were in compliance with the various financial covenants included in
our credit agreements and we do not expect these covenants to adversely impact our ability to execute our
growth strategy or conduct normal business operations.
Unconsolidated Joint Ventures
We have investments in unconsolidated joint ventures in Phoenix, Arizona; Indianapolis, Indiana; and
Dayton, Ohio, which are accounted for under the equity method of accounting. We believe that our transactions
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