Quest Diagnostics 2000 Annual Report Download - page 85

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands unless otherwise indicated)
F-15
The following table summarizes the Company's accruals for restructuring costs associated with the planned
integration of SBCL affecting Quest Diagnostics’ operations and employees (in millions):
Employee
Severance
Costs
Costs of
Exiting Leased
Facilities Other Total
1999 Provision.......................................................... $ 23.4 $ 8.9 $ 0.8 $ 33.1
Amounts utilized in 1999.......................................... (2.5) - - (2.5)
Balance at December 31, 1999 ............................. 20.9 8.9 0.8 30.6
Amounts utilized in 2000.......................................... (10.5) (1.5) (0.4) (12.4)
Adjustment to accruals.............................................. (1.6) (0.8) 0.3 (2.1)
Balance at December 31, 2000 ............................. $ 8.8 $ 6.6 $ 0.7 $ 16.1
Of the revised 500 Quest Diagnostics employees expected to be severed during the initial phase of the SBCL
integration, approximately 350 employees had been severed in connection with integration activities through December
31, 2000, including approximately 285 employees severed during 2000.
While a significant portion of the remaining accruals associated with the SBCL integration plan are expected to
be paid in 2001, there are certain severance and facility related exit costs, principally lease obligations, that have payment
terms extending beyond 2001.
5. TAXES ON INCOME
In conjunction with the Spin-Off Distribution, the Company entered into a tax sharing agreement with its
former parent and a former subsidiary, which allocates among them responsibility for federal, state and local taxes
relating to taxable periods before and after the Spin-Off Distribution and provides for computing and apportioning tax
liabilities and tax benefits for such periods among the parties. The Company also entered into tax indemnification
agreements with the same entities that provide the parties with certain rights of indemnification against each other.
The Company’s pretax income (loss) consisted of approximately $202.6 million, $17.7 million and $52.7
million from U.S. operations and approximately $(1.6) million, $(3.3) million and $1.2 million from foreign operations
for the years ended December 31, 2000, 1999 and 1998, respectively.
The components of income tax expense for 2000, 1999 and 1998 were as follows:
2000 1999 1998
Current:
Federal......................................................................................... $ 52,852 $ 34,314 $ 8,754
State and local............................................................................. 8,506 10,073 4,861
Foreign ........................................................................................ 838 785 1,071
Deferred:
Federal......................................................................................... 21,776 (22,336) 14,728
State and local............................................................................. 12,061 (7,178) (2,438)
Total ........................................................................................ $ 96,033 $ 15,658 $ 26,976