Quest Diagnostics 2000 Annual Report Download - page 86

QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands unless otherwise indicated)
F-16
A reconciliation of the federal statutory rate to the Company's effective tax rate for 2000, 1999 and 1998 was as
follows:
2000 1999 1998
Tax provision (benefit) at statutory rate......................................... 35.0% 35.0% 35.0%
State and local income taxes, net of federal benefit 5.6 4.3 3.4
Non-deductible goodwill amortization .......................................... 6.7 55.7 9.3
Impact of foreign operations .......................................................... 0.4 11.6 1.2
Non-deductible meals and entertainment expense ........................ 0.7 5.1 1.2
Other, net ........................................................................................ (0.6) (2.8) -
Effective tax rate ..................................................................... 47.8% 108.9% 50.1%
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and
liabilities at December 31, 2000 and 1999 were as follows:
2000 1999
Current deferred tax asset:
Accounts receivable reserve....................................................... $ 46,266 $ 11,459
Liabilities not currently deductible............................................. 94,107 134,206
Accrued settlement reserves ....................................................... 34,430 19,542
Accrued restructuring and integration costs............................... 13,205 17,784
Net operating losses.................................................................... - 8,830
Other............................................................................................ 475 987
Total ........................................................................................ $ 188,483 $ 192,808
Non-current deferred tax asset (liability):
Liabilities not currently deductible............................................. $ 34,062 $ 27,581
Accrued settlement reserves ....................................................... 600 13,351
Accrued restructuring and integration costs............................... 2,763 12,886
Depreciation and amortization ................................................... 1,062 (17,644)
Net operating losses.................................................................... 4,135 -
Total ........................................................................................ $ 42,622 $ 36,174
As of December 31, 2000, $4.1 million of deferred tax assets had been recorded to reflect the benefit associated
with approximately $86 million of net operating losses for state income tax purposes with expiration dates through 2020.
Income taxes payable at December 31, 2000 and 1999 were $18.5 million and $29.3 million, respectively, and
consisted primarily of federal income taxes payable of $20.6 million and $24.9 million, respectively.
6. SUPPLEMENTAL CASH FLOW DATA
2000 1999 1998
Depreciation expense ..................................................................... $ 88,631 $ 61,051 $ 47,148
Interest expense .............................................................................. $ 119,681 $ 69,842 $ 43,977
Interest income ............................................................................... (6,589) (8,392) (10,574)
Interest, net ..................................................................................... 113,092 $ 61,450 $ 33,403
Interest paid .................................................................................... $ 110,227 $ 62,662 $ 41,243
Income taxes paid........................................................................... $ 21,821 $ 24,545 $ 16,269