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June 26, 2007
Jefferies HealthcareConference
Patients Growth People
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»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
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»Who is Quest Diagnostics?
Leader in Providing Healthcare Insights and SolutionsComprehensive Diagnostic Testing
Routine ——» Esoteric• Diagnose• Monitor• Predict• Prevent
Advanced Information Technology SolutionsImprove Care and Efficiency
Facilitate Introduction of New TherapeuticsClinical Trials Testing
Touching the Lives of Patients >150 Million Times in 2006
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»Quest Diagnostics: The Leader
Source: Washington G-2 Reports and company estimatesQuest Diagnostics data is proforma for AmeriPath acquisition
US Diagnostic Testing Market: ~$45 B
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»A Leader Across All Product Lines
$ in millions
Based on 2006 Actual Results, proforma for AmeriPath acquisition
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»Favorable Industry Trends
Growing and Aging Population
Innovations in Science & Medicine
Personal Interest in Health
Convergence of Technologies• Genetic Predisposition• Diagnostic Testing• Diagnostic Imaging • Information Technology
Essential Healthcare Service
Influences >70% of Healthcare Decisions
Patients Growth People
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»Why Quest Diagnostics?
Superior Patient Experience
Six Sigma Quality
Unparalleled Access and Distribution
Innovative Science & Medicine
Advanced Information Technology
Unique Value Proposition
Sustainable Advantage
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IOPs
PSCs
RRLsMain Labs∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃∃
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Patient Service Centersand Laboratory Network
~2,300 Laboratories and Patient Service Centers Serving Half of US Physicians
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>100,000 Physician Users and Growing by >1,000 Physicians Each Month
Electronic Connectivity: Care360 Network
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Patients Growth People
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»Preferred by Physicians
Asked If Physicians Had a Preference Between 2 Largest Labs:
Majority Had a Preference
Overwhelmingly Chose Quest
Recent Nationwide Survey Completed by National Analysts Worldwide
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»Health Plan Contracting Approach
Customize Solutions for Each Health Plan
Offer Differentiated Service and Convenient Access for Their Members
Price Competitively
Focused on Maintaining Mutually Beneficial Relationships
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Approach to DrivingProfitable Growth
Provide Differentiated Service at Competitive PricesFocus on High Growth Segments
Cancer DiagnosticsCardiovascular DiseaseInfectious DiseaseMolecular Diagnostics
Introduce Important & Unique Tests & ServicesExpand Geographic Scope
Expand Diagnostic Scope – Near Patient Testing
Increasing Loyalty with Patients, Physicians and Payers
Building a Sustainable Competitive Advantage
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»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
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Patients Growth People
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»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
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»Near Patient Testing
Attractive benefits for hospitals and physician offices
Enables more timely and effective decisions
Expanding product menu
Combine with central lab results to createcomplete patienttesting record available tophysicians and plans
An Opportunity to Improve Patient Care and …
…to Reduce Medical Costs
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Improving Revenue Mix to Higher Margin, Differentiated Services
Quest Diagnostics 2006A Revenue
Gene-based and Esoteric16%
Anatomic Pathology10%
Routine62%
Drugs of Abuse4%
Other8%
AmeriPath 2006A Revenue
Esoteric20%
Anatomic Pathology78%
Other2%
Total Quest Revenue: $6.3 Billion
Total AmeriPath Revenue: $752 million
Pro Forma Quest Diagnostics Revenue
Gene-based and Esoteric17%
Anatomic Pathology17%
Routine56%
Drugs of Abuse3%
Other7%
Total Pro Forma Revenue: ~$7.0 Billion
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»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
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