Quest Diagnostics (DGX)

11.        SUBSEQUENT EVENT

          On April 16, 2007, the Company signed a definitive agreement to acquire AmeriPath, Inc., (“AmeriPath”), in an all-cash transaction valued at approximately $2 billion, including approximately $770 million of debt at closing. AmeriPath is a leading provider of dermatopathology, anatomic pathology and esoteric testing with annualized revenues in excess of $800 million.

          The transaction is expected to be completed during the second quarter of 2007 and is subject to the satisfaction of customary conditions, including regulatory clearance. The Company intends to finance the purchase price and the repayment of AmeriPath’s existing debt and the amounts outstanding under the term loan due January 2008, with the proceeds of a new $1 billion one-year bridge loan and a new five-year $1.5 billion term loan, both committed to be underwritten by Morgan Stanley. The bridge loan is expected to be refinanced shortly after the closing. In addition, Morgan Stanley will underwrite a $750 million revolving credit facility which will replace the Company’s existing revolving credit facility. The acquisition will be accounted for under the purchase method of accounting.

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9.       SUBSEQUENT EVENT

          During the fourth quarter 2005, NID instituted its second voluntary product hold within a six-month period, due to quality issues, which has adversely impacted the operating performance of NID. As a result, the Company evaluated a number of strategic options for NID. On April 19, 2006, the Company decided to discontinue NID’s operations. This decision is expected to result in a pre-tax charge in the second quarter of 2006 preliminarily estimated to be up to $45 million. The estimated charge is expected to principally relate to the write-off of operating assets and the accrual of liabilities associated with employee severance costs and various lease commitments. The associated cash expenditures are estimated to be up to $35 million. The table below indicates the major classes of NID’s assets and liabilities as of March 31, 2006 (amounts in thousands):