Quest Diagnostics 2005 Annual Report Download - page 97

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QUEST DIAGNOSTICS INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands unless otherwise indicated)
For the year ended December 31, 2005, the Company recorded a $7.5 million charge which is included in
other operating expense (income), net in the consolidated statement of operations, to write-off all of the
goodwill associated with its test kit manufacturing subsidiary, NID. See Note 15 for further details. For the year
ended December 31, 2004, the reduction in goodwill was primarily related to an increase in pre-acquisition tax
net operating losses and credit carryforwards associated with businesses acquired.
Amortizing intangible assets at December 31, 2005 and 2004 consisted of the following:
Weighted
Average
Amortization
Period December 31, 2005 December 31, 2004
Accumulated Accumulated
Cost Amortization Net Cost Amortization Net
Amortizing
intangible assets:
Customer-related
intangibles ....... 20 years $172,522 $(39,297) $133,225 $42,225 $(37,197) $ 5,028
Non-compete
agreements ....... 5 years 45,707 (44,221) 1,486 44,942 (42,348) 2,594
Other .............. 6 years 7,044 (3,772) 3,272 6,850 (3,010) 3,840
Total ............ 20 years $225,273 $(87,290) $137,983 $94,017 $(82,555) $11,462
Amortization expense related to intangible assets was $4,730, $6,703 and $8,201 for the years ended
December 31, 2005, 2004 and 2003, respectively.
The estimated amortization expense related to amortizable intangible assets for each of the five succeeding
fiscal years and thereafter as of December 31, 2005 is as follows:
Fiscal Year Ending
December 31,
2006 ............................................................ $ 9,374
2007 ............................................................ 7,983
2008 ............................................................ 7,790
2009 ............................................................ 7,375
2010 ............................................................ 7,128
Thereafter ....................................................... 98,333
Total .......................................................... $137,983
Intangible assets not subject to amortization at December 31, 2005 consisted of $9.4 million of tradenames
resulting from the acquisition of LabOne on November 1, 2005 (see Note 3).
9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses at December 31, 2005 and 2004 consisted of the following:
2005 2004
Accrued wages and benefits ................................................. $275,709 $265,126
Accrued expenses ........................................................... 266,716 247,134
Trade accounts payable ...................................................... 193,385 128,488
Income taxes payable ....................................................... 28,643 28,239
Total ..................................................................... $764,453 $668,987
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