FORWARD-LOOKING STATEMENTS

The Company has made in this report, and from time to time may otherwise make in its public filings, press releases and discussions by Company management, forward-looking statements concerning the Company's operations, performance and financial condition, as well as its strategic objectives. Some of these forward-looking statements can be identified by the use of forward-looking words such as "believes", "expects", "may", "will", "should", "seeks", "approximately", "intends", "plans", "estimates", or "anticipates" or the negative of those words or other comparable terminology. Such forward-looking statements are subject to various risks and uncertainties and the Company claims the protection afforded by the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from those currently anticipated due to a number of factors in addition to those discussed elsewhere herein and in the Company's other public filings, press releases and discussions with Company management, including:

1. changes in federal, state, local and third party payer regulations or policies (or in the interpretation of current regulations) affecting governmental and third-party coverage or reimbursement for clinical laboratory testing;

2. adverse results from investigations or audits of clinical laboratories by the government, which may include significant monetary damages, refunds and/or exclusion from the Medicare and Medicaid programs;

3. loss or suspension of a license or imposition of a fine or penalties under, or future changes in, or interpretations of, the law or regulations of the Clinical Laboratory Improvement Act of 1967, and the Clinical Laboratory Improvement Amendments of 1988, or those of Medicare, Medicaid, the False Claims Act or other federal, state or local agencies;

4. failure to comply with the Federal Occupational Safety and Health Administration requirements and the Needlestick Safety and Prevention Act, which may result in penalties and loss of licensure;

5. failure to comply with HIPAA, including changes to federal and state privacy and security obligations and changes to HIPAA, including those changes included within the Health Information Technology for Economic and Clinical Health Act ("HITECH"), which could result in increased costs, denial of claims and/or significant penalties;

6. failure of third-party payers to complete testing with the Company, or accept or remit transactions in HIPAA-required standard transaction and code set format, (including NPI), which could result in an interruption in the Company's cash flow;

7. failure of the Company, third party payors or physicians to comply with Version 5010 Transactions or the ICD-10-CM and ICD-10-PCS Code Sets issued by the Department of Health and Human Services and effective for claims submitted as of October 1, 2013;

8. increased competition, including competition from companies that do not comply with existing laws or regulations or otherwise disregard compliance standards in the industry;

9. increased price competition, competitive bidding for laboratory tests and/or changes or reductions to fee schedules;

10. changes in payer mix, including an increase in capitated managed-cost health care or the impact of a shift to consumer-driven health plans;

11. failure to obtain and retain new customers and alliance partners, or a reduction in tests ordered or specimens submitted by existing customers;

12. failure to retain or attract managed care business as a result of changes in business models, including new risk based or network approaches, or other changes in strategy or business models by managed care companies;

13. failure to effectively integrate and/or manage newly acquired businesses and the cost related to such integration;

14. adverse results in litigation matters;

15. inability to attract and retain experienced and qualified personnel;

16. failure to maintain the Company's days sales outstanding and/or bad debt expense levels;

17. decrease in the Company's credit ratings by Standard & Poor's and/or Moody's;

18. discontinuation or recalls of existing testing products;

19. failure to develop or acquire licenses for new or improved technologies, or if customers use new technologies to perform their own tests;

20. inability to commercialize newly licensed tests or technologies or to obtain appropriate coverage or reimbursement for such tests, which could result in impairment in the value of certain capitalized licensing costs;

21. changes in government regulations or policies affecting the approval, availability of, and the selling and marketing of diagnostic tests;

22. inability to obtain and maintain adequate patent and other proprietary rights for protection of the Company's products and services and successfully enforce the Company's proprietary rights;

23. the scope, validity and enforceability of patents and other proprietary rights held by third parties which might have an impact on the Company's ability to develop, perform, or market the Company's tests or operate its business;

24. failure in the Company's information technology systems resulting in an increase in testing turnaround time or billing processes or the failure to meet future regulatory or customer information technology, data security and connectivity requirements;

25. failure of the Company's financial information systems resulting in failure to meet required financial reporting deadlines;

26. failure of the Company's disaster recovery plans to provide adequate protection against the interruption of business and/or to permit the recovery of business operations;

27. business interruption or other impact on the business due to adverse weather (including hurricanes), fires and/or other natural disasters and terrorism or other criminal acts;

28. liabilities that result from the inability to comply with corporate governance requirements;

29. significant deterioration in the economy or financial markets which could negatively impact the Company's testing volumes, cash collections and the availability of credit for general liquidity or other financing needs; and

30. changes in reimbursement by foreign governments and foreign currency fluctuations.

During the first quarter of 2009, the Company continued to strengthen its financial performance through the implementation of the Company's strategic plan and the expansion of its national platform. The Company has been successful in growing many of its focus areas, in such areas as esoteric testing, disease management and companion diagnostics.

RESULTS OF OPERATIONS (amounts in millions except Revenue Per Accession info)



Three months ended March 31, 2009 compared with three months ended March 31,
2008



Net Sales

                                   Quarter Ended March 31,
                            -------------------------------------
                               2009         2008       % Change
                            -------------------------------------
Net Sales
   Routine Testing          $   714 .0   $   685 .5       4.2%
   Genomic and Esoteric         386 .1       353 .6       9.2%
   Ontario, Canada               55 .6        64 .1     (13.2% )
                              --------     --------     ---------
   Total                    $ 1,155 .7   $ 1,103 .2       4.8%
                              --------     --------     ---------

                                   Number of Accessions
                                 Quarter Ended March 31,
                            ----------------------------------
                               2009        2008      % Change
                            ----------------------------------
Volume
   Routine Testing              21 .5       21 .4       0.9%
   Genomic and Esoteric          6 .2        5 .6       9.0%
   Ontario, Canada               2 .2        1 .8      23.6%
                               -------      -----      -------
   Total                        29 .9       28 .8       3.9%
                               -------      -----      -------

                                 Quarter Ended March 31,
                            ---------------------------------
                              2009       2008      % Change
                            ---------------------------------
Revenue Per Accession
   Routine Testing          $ 33 .18   $ 32 .13       3.3%
   Genomic and Esoteric       62 .67     62 .55       0.2%
   Ontario, Canada            24 .50     34 .90     (29.8% )
                              ------     ------     ---------
   Total                    $ 38 .59   $ 38 .28       0.8%
                              ------     ------     ---------

The increase in net sales for the three months ended March 31, 2009 as compared with the corresponding 2008 period was driven primarily by growth in the Company's Managed Care business and the Company's continued shift in test mix to higher priced genomic and esoteric tests. Managed Care revenue as a percentage of net sales for routine testing and genomic and esoteric increased from 44.0% in 2008 to 44.8% in 2009. Genomic and esoteric volume as a percentage of volume for routine and genomic and esoteric increased from 21.0% in 2008 to 22.3% in 2009. Net sales of the Ontario joint venture were $55.6 for the three months ended March 31, 2009 compared to $64.1 in the corresponding 2008 period, a decrease of $8.5, or 13.2%. The decrease in net sales for the Ontario joint venture was due to the exchange rate impact of a stronger U.S. dollar in 2009 as compared with 2008.

Cost of Sales

                                         Quarter Ended March 31,
                                  -------------------------------------
                                     2009         2008       % Change
                                  -------------------------------------
Cost of sales                     $   666 .3   $   632 .7        5.3%
Cost of sales as a % of sales       57.7%        57.4%

Cost of sales, which includes primarily laboratory and distribution costs, increased 5.3% in 2009 as compared with 2008 primarily due to increased volume and the continued shift in test mix to higher cost genomic and esoteric testing. As a percentage of net sales, cost of sales increased to 57.7% in 2009 from 57.4% in 2008. The increase in cost of sales as a percentage of net sales is primarily due to increases in

Selling, General and Administrative Expenses

                                                        Quarter Ended March 31,
                                                 -------------------------------------
                                                    2009         2008       % Change
                                                 -------------------------------------
Selling, general and administrative expenses     $   233 .8   $   215 .6        8.4%
SG&A as a % of sales                               20.2%        19.5%

Selling, general and administrative expenses increased 8.4% in 2009 as compared with 2008 primarily due to increases in bad debt expense, personnel costs (primarily employee benefit costs) and acquisition and legal costs.

Amortization of Intangibles and Other Assets

                                                       Quarter Ended March 31,
                                                 ------------------------------------
                                                    2009         2008      % Change
                                                 ------------------------------------
Amortization of intangibles and other assets      $  15 .1      $ 13 .8        9.4%

The increase in amortization of intangibles and other assets primarily reflects certain acquisitions closed during 2008.

Interest Expense

                          Quarter Ended March 31,
                     ---------------------------------
                       2009       2008      % Change
                     ---------------------------------
Interest expense      $  17 .0   $ 19 .9     (14.6% )

The decrease in interest expense was primarily driven by lower interest rates in connection with the Term Loan Facility as a result of the three-year interest rate swap agreement the Company entered into on March 31, 2008 to hedge variable interest rate risk on the Term Loan Facility.

Income from Joint Venture Partnerships

                                                Quarter Ended March 31,
                                           ---------------------------------
                                             2009        2008     % Change
                                           ---------------------------------
Income from joint venture partnerships      $  2 .8     $ 4 .4     (36.4% )

Income from investments in joint venture partnerships represents the Company's ownership share in joint venture partnerships. A significant portion of this income is derived from the investment in Alberta, Canada, and is earned in Canadian dollars. As a result, the decrease in income from joint venture partnerships was primarily due to the exchange rate impact of a stronger U.S. dollar in 2009 as compared with 2008.

Income Tax Expense

                                           Quarter Ended March 31,
                                   ---------------------------------------
                                      2009         2008        % Change
                                   ---------------------------------------
Income tax expense                 $    90 .4   $    91 .6         (1 .3%)
Income tax expense as a % of
income before tax                    40.0%        40.6%

The decrease in the effective tax rate for 2009 as compared to 2008 was primarily the result of a lower rate of taxes on foreign related earnings.

LIQUIDITY AND CAPITAL RESOURCES (dollars and shares in millions)

The Company's operations provided $208.9 and $176.5 of cash, net of $5.5 and $13.0 in transition payments to UnitedHealthcare, for the three months ended March 31, 2009 and 2008, respectively, and net of the $41.0 contribution to the Company's defined benefit retirement plan ("Company Plan") during the three months ended March 31, 2009. The increase in cash flows primarily resulted from improved cash collections and general working capital management.

For the three months ended March 31, 2008, the Company did not make any contributions to the Company Plan. However, based upon the underlying value of the Company Plan's assets and the amount of the Company Plan's benefit obligation as of December 31, 2008, the Company made contributions of $41.0 during the three months ended March 31, 2009. The Company plans to contribute an additional $13.8 to the Company Plan during 2009.

Due to the stock market's performance in 2008, the fair value of assets in the Company Plan decreased significantly from January 1, 2008 to December 31, 2008. As a result, the Company's projected pension expense for the Company Plan and the nonqualified supplemental retirement plan will increase from $19.5 in 2008 to $34.2 in 2009.

Capital expenditures were $30.7 and $37.9 for the three months ended March 31, 2009 and 2008, respectively. The Company expects capital expenditures of approximately $130.0 in 2009. The Company will continue to make important investments in its business, including information technology. Such expenditures are expected to be funded by cash flow from operations, as well as borrowings under the Company's revolving credit facilities as needed.

On September 15, 2008, Lehman Brothers Holdings, Inc. ("Lehman"), whose subsidiaries have a $28.0 commitment in the Company's Revolving Facility, filed for bankruptcy. Accordingly, the Company does not expect Lehman will fulfill its pro rata share of any future borrowing requests under the Revolving Facility. The Company is considering various options regarding this current limitation on the Revolving Facility.

The Company has an interest rate swap agreement with a remaining term of two years to hedge variable interest rate risk on the Company's variable interest rate term loan. On a quarterly basis under the swap, the Company pays a fixed rate of interest (2.92%) and receives a variable rate of interest based on the three-month LIBOR rate on an amortizing notional amount of indebtedness equivalent to the term loan balance outstanding. The swap has been designated as a cash flow hedge. Accordingly, the Company recognizes the fair value of the swap in the condensed consolidated balance sheets and any changes in the fair value are recorded as adjustments to accumulated other comprehensive income
(loss), net of tax. The fair value of the interest rate swap agreement is the estimated amount that the Company would pay or receive to terminate the swap agreement at the reporting date. The fair value of the swap was a liability of $13.1 and $13.5 at March 31, 2009 and December 31, 2008, respectively, and is included in other liabilities in the condensed consolidated balance sheets. The Company is exposed to credit-related losses in the event of nonperformance by the counterparty to the swap agreement. Management does not expect the counterparty to fail to meet its obligation.

At March 31, 2009, the Company provided letters of credit aggregating approximately $97.4, primarily in connection with certain insurance programs and contractual guarantees on obligations under the Company's contract with UnitedHealthcare. Subsequent to March 31, 2009, UnitedHealthcare waived its requirement that the Company provide a $50.0 letter of credit, as security for the Company's contingent obligation to reimburse up to $200.0 in transition costs during the first three years of the contract. Letters of credit provided by the Company are secured by the Company's senior credit facilities and are renewed annually, around mid-year.

During the three months ended March 31, 2009, the Company did not purchase any shares of its common stock. As of March 31, 2009, the Company had outstanding authorization from the Board of Directors to purchase approximately $95.2 of Company common stock.

The Company had a $92.3 and $86.7 reserve for unrecognized income tax benefits, including interest and penalties, at March 31, 2009 and December 31, 2008, respectively. Substantially all of these tax reserves are classified in other long-term liabilities in the Company's Condensed Consolidated Balance Sheets at March 31, 2009 and December 31, 2008, respectively.

Based on current and projected levels of operations, coupled with availability under its senior credit facilities, the Company believes it has sufficient liquidity to meet both its anticipated short-term and long-term cash needs; however, the Company continually reassesses its liquidity position in light of market conditions and other relevant factors.

The Company's common stock trading price conversion feature of its zero-coupon subordinated notes was not triggered by first quarter 2009 trading prices. As a result, the zero-coupon subordinated notes may not be converted during the period of April 1, 2009 through June 30, 2009 based on this conversion feature.

The Company's common stock trading price contingent cash interest feature of its zero-coupon subordinated notes was not triggered by the average market price of the Company's common stock for the five trading days ended March 9, 2009. As a result, the zero-coupon subordinated notes will not accrue contingent cash interest for the period of March 12, 2009 to September 11, 2009.

Noncontrolling Interest Put

Effective January 1, 2008 the Company acquired additional partnership units in its Ontario, Canada ("Ontario") joint venture, bringing the Company's percentage interest owned to 85.6%. Concurrent with this acquisition, the terms of the joint venture's partnership agreement were amended. The amended joint venture's partnership agreement enables the holders of the noncontrolling interest to put the remaining partnership units to the Company in defined future periods, at an initial amount equal to the consideration paid by the Company in 2008, and subject to adjustment based on market value formulas contained in the agreement. The contractual value of the put, in excess of the current noncontrolling interest of $23.5, totals $95.5 at March 31, 2009.