Quest Diagnostics 2012 Annual Report Download - page 110

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F- 37
of the proceeds. Subsequent to the Repurchase and the Offering, GSK no longer beneficially owned any shares of Quest
Diagnostics common stock.
Quest Diagnostics is the primary provider of testing to support GSK's clinical trials testing requirements under a
worldwide agreement (the “Clinical Trials Agreement”). Net revenues, primarily derived under the Clinical Trials Agreement,
were $63 million for 2010.
17. COMMITMENTS AND CONTINGENCIES
Letter of Credit Lines and Contractual Obligations
The Company has a line of credit with a financial institution totaling $85 million for the issuance of letters of credit
(the “Letter of Credit Line”). The Letter of Credit Line, which is renewed annually, matures on November 18, 2013.
In support of its risk management program, to ensure the Company’s performance or payment to third parties, $60
million in letters of credit were outstanding at December 31, 2012. The letters of credit primarily represent collateral for current
and future automobile liability and workers’ compensation loss payments. In addition, $1 million of bank guarantees were
outstanding at December 31, 2012 in support of certain foreign operations.
Minimum rental commitments under noncancelable operating leases, primarily real estate, in effect at December 31,
2012 are as follows:
Year Ending December 31,
2013 $ 181,167
2014 140,261
2015 106,603
2016 72,070
2017 42,922
2018 and thereafter 130,243
Minimum lease payments 673,266
Noncancelable sub-lease income —
Net minimum lease payments $ 673,266
Operating lease rental expense for 2012, 2011 and 2010 totaled $211 million, $218 million and $195 million,
respectively. Rent expense associated with operating leases that include scheduled rent increases and tenant incentives,
such as rent holidays, is recorded on a straight-line basis over the term of the lease.
The Company has certain noncancelable commitments to purchase products or services from various suppliers,
mainly for consulting and other service agreements, and standing orders to purchase reagents and other laboratory supplies.
At December 31, 2012, the approximate total future purchase commitments are $96 million, of which $39 million are
expected to be incurred in 2013, $47 million are expected to be incurred in 2014 through 2015 and the balance thereafter.
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(dollars in thousands unless otherwise indicated)