Quest Diagnostics 2012 Annual Report Download - page 71

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Contractual Obligations and Commitments
The following table summarizes certain of our contractual obligations as of December 31, 2012:
Payments due by period
(in thousands)
Contractual Obligations Total
Less than
1 year 1-3 years 3-5 years After 5 years
Outstanding debt $ 3,300,000 $ — $ 700,000 $ 675,000 $ 1,925,000
Capital lease obligations 27,610 9,404 15,440 2,754 12
Interest payments on outstanding debt 2,070,428 165,861 326,730 258,555 1,319,282
Operating leases 673,266 181,167 246,864 114,992 130,243
Purchase obligations 95,944 39,234 46,837 8,202 1,671
Merger consideration obligation 960 960———
Total contractual obligations $ 6,168,208 $ 396,626 $ 1,335,871 $ 1,059,503 $ 3,376,208
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, 2012 applied to the December 31, 2012 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 12 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, 2012 is contained in Note 17 to the Consolidated Financial
Statements. A full discussion and analysis regarding our acquisition of Celera and the merger consideration related to shares of
Celera which had not been surrendered as of December 31, 2012 is contained in Note 5 to the Consolidated Financial
Statements.
As of December 31, 2012, our total liabilities associated with unrecognized tax benefits were approximately $199
million, which were excluded from the table above. We believe it is reasonably possible that these liabilities may decrease by
up to approximately $8 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 7 to the Consolidated Financial Statements
for information regarding our contingent tax liability reserves.
Our credit agreements 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, 2012, 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 with our joint ventures are
conducted at arm’s length, reflecting current market conditions and pricing. Total net revenues of our unconsolidated joint
ventures equal less than 6% of our consolidated net revenues. Total assets associated with our unconsolidated joint ventures are
less than 2% of our consolidated total assets. We have no material unconditional obligations or guarantees to, or in support of,
our unconsolidated joint ventures and their operations.
Requirements and Capital Resources
We estimate that we will invest approximately $250 million during 2013 for capital expenditures to support and
expand our existing operations, principally related to investments in information technology, laboratory equipment and
facilities, including specific initiatives associated with our Invigorate program.