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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001

(in thousands)



 

2003

2002

2001

 

 

 

 

Cash flows from operating activities:

 

 

 

Net income...................................................................................................

    $ 436,717

    $ 322,154

$ 162,303

Adjustments to reconcile net income to net cash provided by operating
    activities:

 

 

 

Depreciation and amortization..................................................................

       153,903

       131,391

       147,727

Provision for doubtful accounts..............................................................

       228,222

       217,360

       218,271

Loss on debt extinguishment...................................................................

                   -

                   -

         42,012

Deferred income tax provision (benefit)..................................................

         33,853

         90,401

            (560)

Minority share of income..........................................................................

         17,630

         14,874

           9,953

Stock compensation expense...................................................................

           5,297

           9,028

         20,672

Tax benefits associated with stock-based compensation plans..............

         30,496

         44,507

         71,917

Other, net.....................................................................................................

         (1,583)

           (813)

           1,034

Changes in operating assets and liabilities:

 

 

 

    Accounts receivable..............................................................................

     (254,865)

    (168,185)

     (230,131)

    Accounts payable and accrued expenses..........................................

         (6,795)

      (12,658)

         12,788

    Integration, settlement and other special charges............................

       (18,942)

      (29,668)

       (48,664)

    Income taxes payable.............................................................................

         26,493

        (3,912)

         23,131

    Other assets and liabilities, net............................................................

         12,373

      (18,108)

         35,350

Net cash provided by operating activities..............................................

       662,799

       596,371

       465,803

 

 

 

 

Cash flows from investing activities:

 

 

 

Business acquisitions, net of cash acquired..........................................

     (237,610)

    (333,512)

     (152,864)

Capital expenditures...................................................................................

     (174,641)

    (155,196)

     (148,986)

Increase in investments and other assets..............................................

       (13,842)

        (9,728)

       (20,428)

Proceeds from disposition of assets.......................................................

           9,043

         10,564

         22,673

Collection of note receivable....................................................................

                   -

         10,660

           2,989

Net cash used in investing activities......................................................

     (417,050)

    (477,212)

     (296,616)

 

 

 

 

Cash flows from financing activities:

 

 

 

Proceeds from borrowings........................................................................

       450,000

       475,237

       969,939

Repayments of debt...................................................................................

     (391,718)

    (634,278)

   (1,175,489)

Purchases of treasury stock.....................................................................

     (257,548)

                   -

                   -

Exercise of stock options..........................................................................

         29,887

         27,034

         25,631

Distributions to minority partners...........................................................

       (14,253)

      (12,192)

         (8,718)

Financing costs paid..................................................................................

         (4,227)

           (129)

       (28,459)

Redemption of preferred stock.................................................................

                   -

                   -

         (1,000)

Preferred dividends paid...........................................................................

                   -

                   -

            (236)

Other.............................................................................................................

              291

           (386)

                   -

Net cash used in financing activities.....................................................

     (187,568)

     (144,714)

     (218,332)

 

 

 

 

Net change in cash and cash equivalents..............................................

         58,181

       (25,555)

       (49,145)

 

 

 

 

Cash and cash equivalents, beginning of year......................................

         96,777

       122,332

       171,477

 

 

 

 

Cash and cash equivalents, end of year..................................................

    $ 154,958

    $    96,777

    $ 122,332







The accompanying notes are an integral part of these statements.

 

 

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