Quest Diagnostics 2014 Annual Report Download - page 90

Download and view the complete annual report

Please find page 90 of the 2014 Quest Diagnostics annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 121

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – CONTINUED
(in millions unless otherwise indicated)
)
FODVVLILHGZLWKLQ/HYHOEHFDXVHWKHLULQSXWVDUHGHULYHGSULQFLSDOO\IURPREVHUYDEOHPDUNHWGDWDE\FRUUHODWLRQWRWKHWUDGLQJ
VHFXULWLHV
 7KH&RPSDQ\RIIHUVFHUWDLQHPSOR\HHVWKHRSSRUWXQLW\WRSDUWLFLSDWHLQDQRQTXDOLILHGGHIHUUHGFRPSHQVDWLRQ
SURJUDP$SDUWLFLSDQWVGHIHUUDOVWRJHWKHUZLWK&RPSDQ\PDWFKLQJFUHGLWVDUH³LQYHVWHG´DWWKHGLUHFWLRQRIWKHHPSOR\HHLQD
K\SRWKHWLFDOSRUWIROLRRILQYHVWPHQWVZKLFKDUHWUDFNHGE\DQDGPLQLVWUDWRU7KH&RPSDQ\SXUFKDVHVOLIHLQVXUDQFHSROLFLHV
ZLWKWKH&RPSDQ\QDPHGDVEHQHILFLDU\RIWKHSROLFLHVIRUWKHSXUSRVHRIIXQGLQJWKHSURJUDPVOLDELOLW\&KDQJHVLQWKHFDVK
VXUUHQGHUYDOXHRIWKHOLIHLQVXUDQFHSROLFLHVDUHEDVHGXSRQHDUQLQJVDQGFKDQJHVLQWKHYDOXHRIWKHXQGHUO\LQJLQYHVWPHQWV
&KDQJHVLQWKHIDLUYDOXHRIWKHGHIHUUHGFRPSHQVDWLRQREOLJDWLRQDUHGHULYHGXVLQJTXRWHGSULFHVLQDFWLYHPDUNHWVEDVHGRQ
WKHPDUNHWSULFHSHUXQLWPXOWLSOLHGE\WKHQXPEHURIXQLWV7KHFDVKVXUUHQGHUYDOXHDQGWKHGHIHUUHGFRPSHQVDWLRQ
REOLJDWLRQVDUHFODVVLILHGZLWKLQ/HYHOEHFDXVHWKHLULQSXWVDUHGHULYHGSULQFLSDOO\IURPREVHUYDEOHPDUNHWGDWDE\FRUUHODWLRQ
WRWKHK\SRWKHWLFDOLQYHVWPHQWV

 7KHIDLUYDOXHPHDVXUHPHQWVRIWKH&RPSDQ\VLQWHUHVWUDWHVZDSVDQGIRUZDUGVWDUWLQJVZDSVDUHPRGHOGHULYHG
YDOXDWLRQVDVRIDJLYHQGDWHLQZKLFKDOOVLJQLILFDQWLQSXWVDUHREVHUYDEOHLQDFWLYHPDUNHWVLQFOXGLQJFHUWDLQILQDQFLDO
LQIRUPDWLRQDQGFHUWDLQDVVXPSWLRQVUHJDUGLQJSDVWSUHVHQWDQGIXWXUHPDUNHWFRQGLWLRQV
 ,QYHVWPHQWLQDYDLODEOHIRUVDOHHTXLW\VHFXULWLHVUHSUHVHQWVDQLQYHVWPHQWWKDWWKH&RPSDQ\SUHYLRXVO\DFFRXQWHGIRU
XQGHUWKHFRVWPHWKRGDVLWFRQVLVWHGRIFRPPRQVKDUHVRIDSULYDWHO\KHOGHQWLW\,Q$SULOWKH&RPSDQ\VLQYHVWHH
UHJLVWHUHGLWVVKDUHVWKURXJKDQLQLWLDOSXEOLFRIIHULQJRQWKH(XURQH[W3DULVH[FKDQJH$VDUHVXOWRIWKHLQLWLDOSXEOLFRIIHULQJ
WKH&RPSDQ\UHFODVVLILHGWKHVKDUHVWRDQLQYHVWPHQWLQDYDLODEOHIRUVDOHHTXLW\VHFXULWLHV7KH&RPSDQ\VLQYHVWPHQWLQ
DYDLODEOHIRUVDOHHTXLW\VHFXULWLHVLVFODVVLILHGZLWKLQ/HYHORIWKHIDLUYDOXHKLHUDUFK\EHFDXVHWKHIDLUYDOXHLVREWDLQHGIURP
TXRWHGSULFHVLQDQDFWLYHPDUNHW
 ,QFRQQHFWLRQZLWKWKHDFTXLVLWLRQRIFHUWDLQEXVLQHVVHVRI80DVVWKH&RPSDQ\JUDQWHGWR80DVVDFDOORSWLRQDQG
80DVVJUDQWHGWRWKH&RPSDQ\DSXWRSWLRQIRU80DVVWRDFTXLUHDQHTXLW\LQWHUHVWLQDQHZO\IRUPHGHQWLW\7KHSXW
DQGFDOORSWLRQVDUHGHULYDWLYHLQVWUXPHQWVWKDWKDYHDUHPDLQLQJYHVWLQJSHULRGRIDSSUR[LPDWHO\PRQWKVDQGWKHLUIDLUYDOXHV
KDYHEHHQPHDVXUHGXVLQJDFRPELQDWLRQRIGLVFRXQWHGFDVKIORZVDQGWKH%ODFN6FKROHVRSWLRQSULFLQJPRGHOVHH1RWH
 ,Q$SULODQGDVIXUWKHUGHWDLOHGLQ1RWHWKH&RPSDQ\FRPSOHWHGWKHDFTXLVLWLRQVRI6WHZDUGDQG6XPPLW
+HDOWK,QFRQQHFWLRQZLWKWKHVHDFTXLVLWLRQVWKH&RPSDQ\LQLWLDOO\UHFRUGHGDQDJJUHJDWHFRQWLQJHQWFRQVLGHUDWLRQOLDELOLW\RI
PLOOLRQ7KHFRQWLQJHQWFRQVLGHUDWLRQOLDELOLW\ZDVFODVVLILHGZLWKLQ/HYHOPHDVXUHGDWIDLUYDOXHXVLQJDSUREDELOLW\
ZHLJKWHGDQGGLVFRXQWHGFDVKIORZPHWKRG7KHVHPHDVXUHPHQWVDUHEDVHGRQH[WHUQDOO\REWDLQHGLQSXWVDQGPDQDJHPHQWV
SUREDELOLW\DVVHVVPHQWVRIWKHRFFXUUHQFHRIWULJJHULQJHYHQWVDSSURSULDWHO\GLVFRXQWHGFRQVLGHULQJWKHXQFHUWDLQWLHVDVVRFLDWHG
ZLWKWKHREOLJDWLRQVDVZHOODVWKHOLNHOLKRRGRIDFKLHYLQJILQDQFLDOWDUJHWV7KHLQLWLDOSUREDELOLW\HVWLPDWHRIWKHRFFXUUHQFH
RIVXFKWULJJHULQJHYHQWVDVVRFLDWHGZLWKWKHDPRXQWVWKH&RPSDQ\FRXOGEHREOLJDWHGWRSD\LQIXWXUHSHULRGVIRUERWK6XPPLW
+HDOWKDQG6WHZDUGZDVEHWZHHQDQG7KHSUREDELOLW\ZHLJKWHGFDVKIORZVZHUHWKHQGLVFRXQWHGXVLQJDGLVFRXQW
UDWHRIWR'XULQJWKHIRXUWKTXDUWHURIDVDUHVXOWRIDORZHUUHYHQXHIRUHFDVWIRU6XPPLW+HDOWKLQWKH
HVWLPDWHGIDLUYDOXHRIWKHFRQWLQJHQWFRQVLGHUDWLRQDFFUXDOZDVUHGXFHGWRPLOOLRQ$VDUHVXOWRWKHURSHUDWLQJLQFRPH
H[SHQVHQHWIRUWKH\HDUHQGHG'HFHPEHULQFOXGHVDJDLQRIPLOOLRQ7KHFRQWLQJHQWFRQVLGHUDWLRQDVVRFLDWHGZLWK
6XPPLW+HDOWKZLOOEHSDLGLQWKHILUVWTXDUWHURIZLWKDPD[LPXPSD\PHQWRIPLOOLRQ7KHFRQWLQJHQWFRQVLGHUDWLRQ
DVVRFLDWHGZLWK6WHZDUGLVSURMHFWHGWREHSDLGRXWLQIRXUHTXDODQQXDOLQVWDOOPHQWVEHJLQQLQJLQZLWKDPD[LPXP
SD\RXWRIPLOOLRQLQWRWDO
48(67',$*1267,&6)250
.