Quest Diagnostics 2013 Annual Report Download - page 70

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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 $935 million, including 15.4 million shares purchased in the first quarter from SB Holdings Capitial
Inc., a wholly owned subsidiary of GlaxoSmithKline plc, at an average price of $54.30 per share for a total of $835 million.
Contractual Obligations and Commitments
The following table summarizes certain of our contractual obligations as of December 31, 2013:
Payments due by period
(in millions)
Contractual Obligations Total
Less than
1 year 1-3 years 3-5 years After 5 years
Outstanding debt $ 3,306 $ 200 $ 806 $ 375 $ 1,925
Capital lease obligations 31 12 14 5 —
Interest payments on outstanding debt 1,897 163 293 228 1,213
Operating leases 734 189 256 115 174
Purchase obligations 279 88 110 56 25
Merger consideration obligation 51 1 50 — —
Total contractual obligations $ 6,298 $ 653 $ 1,529 $ 779 $ 3,337
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, 2013 applied to the December 31, 2013 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 13 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, 2013 is contained in Note 18 to the consolidated financial
statements. Merger consideration obligation primarily includes consideration owed on the UMass and Celera acquisitions. A
full discussion and analysis regarding our acquisitions of UMass and Celera and the related merger consideration obligations as
of December 31, 2013 is contained in Note 5 to the consolidated financial statements.
As of December 31, 2013, our total liabilities associated with unrecognized tax benefits were approximately $168
million, which were excluded from the table above. We believe it is reasonably possible that these liabilities may decrease by
up to approximately $3 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 8 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, 2013, 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.
Equity Method Investees
Our equity method investees consist of: (1) unconsolidated joint ventures in Phoenix, Arizona; Indianapolis, Indiana;
and Dayton, Ohio; and (2) an investment in an Australian company, which are accounted for under the equity method of
accounting. We believe that our transactions with our equity method investees are conducted at arm’s length, reflecting current
market conditions and pricing. Total net revenues of our equity method investees equal approximately 6% of our consolidated
net revenues. Total assets associated with our equity method investees are less than 2% of our consolidated total assets. We
have no material unconditional obligations or guarantees to, or in support of, our equity method investees and their operations.