2008 - A Year of Strong Performance




                        January 26, 2009
This presentation may contain forward-looking statements. Readers are cautioned not to place undue reliance
on forward-loo...
“2008 was a year of solid performance, and our
business is healthy and growing. We delivered
strong revenue and earnings g...
History of Strong Growth




                                                        20%
                                 ...
Moving to Higher Growth,
                       Higher Margin Testing Segments

     2000 Revenue                       20...
Our Longer Term Goals

•Undisputed World Leader in Diagnostic Testing,
 Information and Services

•Profitably Grow > Indus...
Strategy to Drive Profitable Growth

Sustainable Competitive Advantage

Deliver Superior Patient Experience
Continuously D...
Solid Q4 2008 Performance
•    Continuing Operations                                  Q4 Discussion Points
•    ($ in mill...
Strong Full Year 2008 Results
•    Continuing Operations                              FY Discussion Points
•    ($ in mill...
2008 – A Year of Considerable
                                          Accomplishments
•                 • 8.1% Revenue g...
2008 – A Year of Considerable
                                        Accomplishments
•   Medical      20% growth in gene-...
2008 – A Year of Considerable
                                           Accomplishments
•                   Added 15,000 ...
2009 Guidance

Continued Revenue & Earnings Growth
                                                         ↑ ~3%
Revenues...
Driving Results

Clear Leader in an Attractive and Growing Industry

Differentiated Offering

Bi-focal Business Approach– ...
Patients | Growth | People


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quest diagnostics 864527C3-2EA7-48BF-B6D1-814381520482_2008_Year_End_Presentation

  1. 1. 2008 - A Year of Strong Performance January 26, 2009
  2. 2. This presentation may contain forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date that they are made and which reflect management's current estimates, projections, expectations or beliefs and which involve risks and uncertainties that could cause actual results and outcomes to be materially different. Risks and uncertainties that may affect the future results of the Company include, but are not limited to, adverse results from pending or future government investigations, lawsuits or private actions, the competitive environment, changes in government regulations, changing relationships with customers, payers, suppliers and strategic partners and other factors discussed in “Business” in Part I, Item 1, “Risk Factors” and “Cautionary Factors that May Affect Future Results” in Part I, Item 1A, “Legal Proceedings” in Part I, Item 3, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 and “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A in the Quest Diagnostics 2007 Annual Report on Form 10-K and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk” in the Company’s 2008 Quarterly Reports on Form 10-Q and other items throughout the Form 10-K and the Company’s 2008 Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Patients | Growth | People 2
  3. 3. “2008 was a year of solid performance, and our business is healthy and growing. We delivered strong revenue and earnings growth, despite the current economic environment. I am very pleased with our continued progress, and expect continued growth in both revenues and earnings in 2009.” Surya N. Mohapatra, Ph.D. Chairman and Chief Executive Officer Patients | Growth | People 3
  4. 4. History of Strong Growth 20% Revenue 1999-2008 10-year CAGR 20% 27% EPS* 1999-2008 10-year CAGR 27% $ in Billions except EPS Patients | Growth | People *EPS is from continuing operations 4
  5. 5. Moving to Higher Growth, Higher Margin Testing Segments 2000 Revenue 2008 Revenue Total Revenue: $3.4 Billion Total Revenue: $7.2 Billion Patients | Growth | People 5
  6. 6. Our Longer Term Goals •Undisputed World Leader in Diagnostic Testing, Information and Services •Profitably Grow > Industry Rate •Expand Operating Income to 20% of Revenues •Expand International Operations to ~10% of Revenues Patients | Growth | People 6
  7. 7. Strategy to Drive Profitable Growth Sustainable Competitive Advantage Deliver Superior Patient Experience Continuously Drive Six Sigma Quality Lead in Medical Innovation/Information Leverage Unparalleled Assets & Capabilities Expand Diagnostic Scope Expand Geographic Reach Patients | Growth | People 7
  8. 8. Solid Q4 2008 Performance • Continuing Operations Q4 Discussion Points • ($ in millions – except EPS) $ ∆ 2007 •Revenues impacted by: Revenues $1,800 +1.7% –Improved test mix - Rev/Req +2.8% –Reduced drugs of abuse testing - Volume - 0.4% –Lab management contracts Operating Income $ 317 +1.6% •$16 charge reduced operating income % by ~1% and EPS $0.05 - % of Revenues 17.6% • Earnings $170 +10% •Tax contingency resolution increased Diluted EPS $0.87 +10% EPS $0.05 Operating Cash $363 +2% Patients | Growth | People 8
  9. 9. Strong Full Year 2008 Results • Continuing Operations FY Discussion Points • ($ in millions – except EPS) ∆ 2007 $ •Revenues impacted by: Revenues $7,249 +8.1% –AmeriPath acquisition (+5%) - Rev/Req +5.5% –Improved test mix - Volume +2.7% –Reduced drugs of abuse testing • Operating Income $1,222 +12% Improvement driven by top-line growth and efficiencies - % of Revenues 16.9% +0.6% Earnings $632 +14% Diluted EPS $3.23 +14% Operating Cash $1,063 +15% Patients | Growth | People 9
  10. 10. 2008 – A Year of Considerable Accomplishments • • 8.1% Revenue growth Financial • 14% Earnings growth 0.6% Margin expansion $ 1.1B Cash from operations $300M Annualized cost savings, on track for $500M savings Joined list of Fortune’s Most Admired Companies • Corporate Dow Jones Sustainability Indexes Recognition “Best Employer for Healthy Lifestyles” by National Business Group on Health Empowering patients by providing lab results through • Patient Google HealthTM • Experience Blueprint for WellnessTM available directly to consumers through web and expanded employer access Expanded use of popular Patient Appointment Scheduling Patients | Growth | People 10
  11. 11. 2008 – A Year of Considerable Accomplishments • Medical 20% growth in gene-based, esoteric and AP revenues • Leadership Gene-based, esoteric and AP is 36% of revenues Launched HE4 -- FDA cleared test to monitor women with ovarian cancer Expanded LeumetaTM test offering to 22 tests Introduced KRAS -- assists treatment decisions for lung and colon cancer patients Licensed Septin 9 biomarker -- developing plasma-based colorectal cancer test Introduced first commercially available test for Chikungunya Launched UroRisk and StoneRisk – gold standard for kidney stone evaluation Introduced age-related macular degeneration susceptibility test Acquired additional biomarker capability to aid development of companion diagnostics Patients | Growth | People 11
  12. 12. 2008 – A Year of Considerable Accomplishments • Added 15,000 physician Care360TM users, bringing total to Unparalleled • >140,000 Assets Increased medication e-prescribing volume ~120% to annualized rate of 4.5 million ChartMaxxTM named “Best in KLAS” Completed implementation of clinical portal for 7 Health Information Exchanges • International presence International • – Obtained cervical cancer testing contract with National & Product Cancer Screening Service of Ireland Expansion – Launched India lab, received CAP, NABL and NGSP Level 1 certification Point of Care and Near Patient Testing – Received CLIA waiver for HemoCue Micro-albumin test – Launched DoYouHaveTheGuts.com to increase colorectal cancer awareness Patients | Growth | People 12
  13. 13. 2009 Guidance Continued Revenue & Earnings Growth ↑ ~3% Revenues Operating Income % approaching 18% $3.50 - $3.70, ↑ 8% - 15% EPS Cash from Operations * ~$1 billion CapEx ~$200 million Improving Operational Efficiencies *Excludes expected payment of the $316 million reserve Patients | Growth | People established for the previously disclosed NID matter 13
  14. 14. Driving Results Clear Leader in an Attractive and Growing Industry Differentiated Offering Bi-focal Business Approach– Doing What is Right in the Short Term and Planning for the Long Term Operationally and Financially Strong Committed to Driving Superior Shareholder Returns Patients | Growth | People 14
  15. 15. Patients | Growth | People 15
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