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March 10, 2009
Barclays Capital Global Healthcare Conference
Patients | Growth | People
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
–Innovative Diagnostic Products• Enable Care Closer to the Patient
–Risk Assessment Solutions to Life Insurance Industry
Touching Patients 150 Million Times Each Year
Patients | Growth | People
History of Strong Growth
20%Revenue 1999-200810-year CAGR 20%
27%EPS* 1999-2008
10-year CAGR 27%
$ in billions except EPS*EPS is from continuing operations
Patients | Growth | People
Favorable Industry Trends
• Growing and Aging Population
• Scientific & Medical Innovations
• Personal Interest in Health
• Convergence of Information
Essential Healthcare Service
Influences >70% of Healthcare Decisions
Patients | Growth | People
Moving to Higher Growth,Higher Margin Testing Segments
2008 Revenue2000 Revenue
Total Revenue: $7.2 BillionTotal Revenue: $3.4 Billion
Patients | Growth | People
Expanding Market Leadership
• Clinical Testing• Gene-based & Esoteric Testing• Employer Services• Anatomic Pathology Testing• Risk Assessment Services • Healthcare Information Technology• Point of Care (Near Patient) Testing• Clinical Trials Testing• International Market
•••• P• -• -• -• P• -
•••••••• P• P
2000 2009
Overall Market Leader/Niche LeadershipP Market Participant
Patients | Growth | People
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
Strategy to Drive Profitable Growth
Deliver Superior Patient Experience
Continuously Drive Six Sigma Quality
Lead in Medical Innovation
Leverage Unparalleled Assets & Capabilities
Expand Diagnostic Scope
Expand Geographic Reach
Leverage Capabilities To Create Differentiation
Sustainable Competitive Advantage
Patients | Growth | People
Patient Gold StandardsPrompt, caring, courteous service
PSC Appointment SchedulingFirst laboratory with PSC appointment schedulingReduces patient wait time; improves convenience
Google Health CollaborationFacilitate patient-physician communicationsSecure electronic access to lab results
Delivering Superior Patient Experience
Patients | Growth | People
Leading Medical Innovator
Multiple Channels to Access New TechnologyInternal Development – Nichols InstituteJoint Development RelationshipsLicensing/Distribution Relationships
Focused on Addressing Areas of Significant Patient NeedCancer, Cardiovascular Conditions, Infectious DiseaseLess invasive; less painful; more convenient for patients
Leading Experts for Medical Consultation900 MDs & PhDs
Culture of Collaborative InnovationAcademic relationshipsInvestment in innovative firms and technologiesPartnerships with pharmaceutical companies
Patients | Growth | People
Continual Stream ofDiagnostic Testing Advances
CancerLeumetaTM
HE-4H/I Breast RecurrenceCancer of Unknown PrimarySeptin 9 Colorectal Cancer Test
Cardiovascular DiseaseIon Mobility (Lipid Profile)
Infectious DiseaseHepaScoreTM
Chikungunya
Transplantation/CoagulationHLA FDA-registered lab
Coag consultations
New Technologies/New ApplicationsXSenseTM (Fragile X)
ClarisureTM (CGH Microarray)
LC/MS for Amino Acids
LC-MS/MS
Italics – under development
Patients | Growth | People
Personalized and Targeted Medicineis an Emerging Opportunity
Enables More Appropriate Drug TherapyRituxan® Rituxan® Sensitivity (CD20)Herceptin® Her2Campath® Campath Sensitivity (CD2)Irinotecan UGT1A1Erbitux® RASWarfarin CYP450 2C9Carbamazephine HLA - screens out certain Asian patientsAbacavir HLA - predisposition to hypersensitivityAspirin Monitor personal resistance levels
Improves Disease ManagementLeumeta™ CellSearchHepascore™
Improving Patient Care …..Reducing Medical Costs
Patients | Growth | People
Unparalleled Assets and Capabilities
2,300 Patient Service Centers and Laboratories900 MD’s and PhD’s 8,500 Phlebotomists &
5,000 Paramedical professionals3,500 Courier Vehicles and 25 Airplanes
- making 90,000 stops each day>140,000 Physician users of Care360POC testing in >100 Countries
Serving 50% of US Hospitals & Physicians
Testing ~1,000,000 Patients a Day through our Labs and POC Devices
Patients | Growth | People
Expanding Diagnostic ScopeNear Patient Testing
Attractive benefits for hospitals, physician offices, rural and international markets
Enables more timely and effective decisions
Expanding product menu
Platform technology
Results integrated into Care360
Opportunity to Improve Patient Care
Reducing Medical Costs
Patients | Growth | People
Expanding Geographic Reach
Clear leadership in U.S….with room to grow
Leverage existing labs in Puerto Rico, Mexico, and UK
Providing cervical cancer screening for Ireland NHS
Increase foreign testing sent to Nichols Institute
Entered India – serving multiple markets
Increasing Market Opportunity
Broadening Our Geographical Coverage
Patients | Growth | People
On Track to Reduce Costs by $500 Million
Streamline Lab Operations
Optimize Logistics Routes and PSC Resources
Improve Billing and Call Center Operations
Leverage Purchasing Capabilities
Maintain Service Levels & Stimulate Growth
Leverage Lean Six Sigma to Improve Efficiency
$300 million savings run rate exiting 2008
Patients | Growth | People
2008 Results
Revenues $7.2 B, ↑ 8.1%
Operating Income 16.9%, ↑ 0.6%
EPS $3.23, ↑14%
Cash from Operations $1.1 Billion
Strong Growth in Revenue, Earnings and Cash Flow
Patients | Growth | People
2009 Guidance
Revenues ↑ ~3%
Operating Income % approaching 18%
EPS $3.50 - $3.70, ↑ 8% - 15%
Cash from Operations * ~$1 billion
CapEx ~$200 million
Continued Revenue & Earnings Growth
*Excludes expected payment of the $316 million reserve established for the previously disclosed NID matter
Strenghening our Leadership Position
Patients | Growth | People
Building on Strength
Leader in a vital and growing industry
Uniquely positioned with unparalleled assets & capabilities
History of disciplined growth and successful acquisitions
Strong cash generator, with a strong balance sheet
Proven management team
Focused on Execution
Patients | Growth | People
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