2. Safe Harbor Disclaimer
»
»
The statements in this presentation which are not historical
facts or information are forward-looking statements. These
forward-looking statements involve risks and uncertainties that
could cause the outcome to be materially different. Certain of
these risks and uncertainties are described in the Quest
Diagnostics Incorporated SEC filings, including our latest Form
10-K. Additional risks may arise from unanticipated events.
A copy of this presentation is available on
our website at www.questdiagnostics.com
Patients Growth People
3. Who is Quest Diagnostics?
»
»Leader in Providing Healthcare Insights and Solutions
Comprehensive Diagnostic Testing
Routine ——» Esoteric
• Diagnose
• Monitor
• Predict
• Prevent
Advanced Information Technology Solutions
Improve Care and Efficiency
Facilitate Introduction of New Therapeutics
Clinical Trials Testing
Touching the Lives of Patients >150 Million Times in 2006
Patients Growth People
4. Quest Diagnostics: The Leader
»
» DiagnosticBTesting
US
Market: ~$45
Source: Washington G-2 Reports and company estimates
Quest Diagnostics data is proforma for AmeriPath acquisition
Patients Growth People
5. A Leader Across All Product Lines
»
»
$ in millions
Based on 2006 Actual Results, proforma for AmeriPath acquisition
Patients Growth People
6. Favorable Industry Trends
»
» Essential Healthcare Service
Growing and Aging Population
Innovations in Science & Medicine
Personal Interest in Health
Convergence of Technologies
• Genetic Predisposition
• Diagnostic Testing
• Diagnostic Imaging
• Information Technology
Influences >70% of Healthcare Decisions
Patients Growth People
7. Why Quest Diagnostics?
»
» Unique Value Proposition
Superior Patient Experience
Six Sigma Quality
Unparalleled Access and Distribution
Innovative Science & Medicine
Advanced Information Technology
Sustainable Advantage
Patients Growth People
8. Patient Service Centers
and Laboratory Network
»
»
PSCs
IOPs
RRLs
∃ Main Labs
∃
~2,300 Laboratories and Patient Service Centers Serving Half of US Physicians
Patients Growth People
9. Electronic Connectivity:
Care360 Network
»
»
>100,000 Physician Users and Growing by >1,000 Physicians Each Month
Patients Growth People
10. Preferred by Physicians
»
» Recent Nationwide Survey
Completed by National
Analysts Worldwide
Asked If Physicians Had a Preference
Between 2 Largest Labs:
Majority Had a Preference
Overwhelmingly Chose Quest
Patients Growth People
11. Health Plan Contracting Approach
»
» Focused on Maintaining Mutually Beneficial
Relationships
Customize Solutions for Each Health Plan
Offer Differentiated Service and Convenient
Access for Their Members
Price Competitively
Patients Growth People
12. Approach to Driving
Profitable Growth
»
» Building a Sustainable Competitive Advantage
Provide Differentiated Service at Competitive Prices
Focus on High Growth Segments
Cancer Diagnostics
Cardiovascular Disease
Infectious Disease
Molecular Diagnostics
Introduce Important & Unique Tests & Services
Expand Geographic Scope
Expand Diagnostic Scope – Near Patient Testing
Increasing Loyalty with Patients, Physicians and Payers
Patients Growth People
13. AmeriPath Acquisition
»
» Creates Leader in Cancer Diagnostics with 900 MDs and PhDs
AmeriPath has National Scale with Significant Local Presence
• Approximately 400 Pathologists and Clinical Scientists
• Over 200 Hospital Contracts in 22 States
• Approximately 40 Outpatient Facilities in 19 States
Strengthens Leadership in Hospital and Esoteric Testing
Strengthens Relationship with Physicians and Payers
Accelerates Revenue and Earnings Growth
Patients Growth People
14. Financial Considerations
»
» Enhances Long-term Shareholder Value and EPS Growth
Leverage AmeriPath Brands and Pathologist Relationships
Accelerate Overall Growth Through Cross-selling Clinical and AP
Services
Realize Economies of Scale on Esoteric Testing Business
$2 Billion Total Transaction Value with Multiple of ~10x 2008 EBITDA
Driven primarily by growth opportunities
Cost synergies focused at Specialty Laboratories
Rationalize capacity, logistics rationalization, improve
purchasing capabilities, eliminate duplicate corporate costs
Maintained Investment Grade Ratings
Patients Growth People
15. Near Patient Testing
»
» An Opportunity to Improve Patient Care and …
Attractive benefits for hospitals and
physician offices
Enables more timely and effective
decisions
Expanding product menu
Combine with central
lab results to create
complete patient
testing record available to
physicians and plans
…to Reduce Medical Costs
Patients Growth People
16. Improving Revenue Mix to Higher
Margin, Differentiated Services
»
Quest Diagnostics 2006A Revenue Pro Forma Quest Diagnostics Revenue
» Other Other
8% 7%
Gene-based and Esoteric Gene-based and Esoteric
Drugs of Abuse Drugs of Abuse
16% 17%
4% 3%
Anatomic Pathology Anatomic Pathology
10% 17%
Routine Routine
62% 56%
Total Quest Revenue: $6.3 Billion
AmeriPath 2006A Revenue Total Pro Forma Revenue: ~$7.0 Billion
Other
2%
Esoteric
20%
Anatomic Pathology
78%
Total AmeriPath Revenue: $752 million
Patients Growth People
17. Building on Strength
»
» Industry Leader in a Vital and Growing Industry
−Leadership in All Major Segments
Unique Value Proposition
A Proven Track Record of Integrating Acquisitions
Proven Management Team
Strong Cash Generator
A History of Disciplined Growth
Patients Growth People
