1022079--2/28/2006--QUEST_DIAGNOSTICS

related topics

{regulation, government, change}

{regulation, change, law}

{cost, operation, labor}

{system, service, information}

{product, candidate, development}

{debt, indebtedness, cash}

{operation, natural, condition}

{provision, law, control}

{property, intellectual, protect}

{cost, regulation, environmental}

{control, financial, internal}

{customer, product, revenue}

{financial, litigation, operation}

Efforts by third party payers, including the government, to reduce utilization and pricing could have a material adverse effect on our net revenues and profitability. If we fail to comply with extensive laws and regulations, we could suffer fines and penalties or be required to make significant changes to our operations. Failure in our information technology systems, including failures resulting from our systems conversions or failures to adapt existing systems to proposed Health Information Technology (HIT) standards, could significantly increase turnaround time, otherwise disrupt our operations, or lead to increased competition by other providers of laboratory services, all of which could reduce our customer base and result in lost net revenues. Integrating our operations with LabOne may be difficult and, if unsuccessfully executed, may have a material adverse effect on our business. The acquisition of LabOne may not produce the anticipated benefits. Failure to timely or accurately bill for our services could have a material adverse effect on our net revenues and bad debt expense. Our outstanding debt may impair our financial and operating flexibility. Twelve Months Ended December 31, Professional liability litigation could have an adverse financial impact and an adverse impact on our client base and reputation. Failure to provide a higher quality of service than that of our competitors could have a material adverse effect on our net revenues and profitability. Regulations requiring the use of standard transactions for healthcare services issued under the Health Insurance Portability and Accountability Act of 1996, or HIPAA, may negatively impact our profitability and cash flows. Compliance with the HIPAA security regulations and privacy regulations may increase our costs. FDA regulation of laboratory-developed tests, analyte specific reagents, or genetic testing could lead to increased costs and delays in introducing new genetic tests. The development of new, more cost-effective tests that can be performed by physicians in their offices or by patients could negatively impact our testing volume and net revenues. Our operations may be adversely impacted by the effects of natural disasters such as hurricanes and earthquakes, or acts of terrorism and other criminal activities. Our tests and business processes may infringe on the intellectual property rights of others, which could cause us to engage in costly litigation, pay substantial damages or prohibit us from selling certain of our tests. Our organizational documents and other agreements contain restrictions that might prevent a takeover or change in management. CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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1022079--2/28/2006--QUEST_DIAGNOSTICS_INC