Quest Diagnostics 2012 Annual Report Download - page 114

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F- 41
During the third quarter of 2006, the Company completed its wind down of NID, a test kit manufacturing subsidiary,
and classified the operations of NID as discontinued operations. Results of operations for NID have been reported as
discontinued operations in the accompanying consolidated statements of operations and related disclosures for all periods
presented. The Company plans to continue to report the operations of NID as discontinued operations until the resolution of
uncertain tax benefits.
On April 15, 2009, the Company finalized the resolution of the federal government investigation related to NID and
entered into a final settlement agreement with the federal government. In the second quarter of 2009, the Company paid $268
million to settle the civil allegations. The Company also entered into a five-year corporate integrity agreement with the Office
of Inspector General for the United States Department of Health and Human Services. In addition, NID pled guilty to a single
count of felony misbranding and paid a $40 million fine. These payments totaling $308 million, which had been previously
reserved, were funded out of cash on-hand and available credit facilities. During the third quarter of 2009, the Company
finalized separate settlement agreements with certain states and paid approximately $6 million, which had been previously
reserved for.
QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(dollars in thousands unless otherwise indicated)